Helping your clients work smarter: the 5 best ways to manage expenses

For clients that are small businesses or new entrepreneurs, that may be unfamiliar with filing and keeping track of their expenses. It can take up a good portion of their time making sure that their records and receipts are in order, but as their accountant, you can make that task a little easier. 

This article will cover 5 tips for you to use so that your clients can work smarter, not harder when it comes to organising their expenses. And in turn, you’ll be able to work more efficiently.

• An acceptable expenses cheatsheet
• Choosing best software for your business
• Keep digital receipts
• Always use a business card
• Choosing the right categories

One of the reasons your clients may struggle with organising their expenses is because they don’t know what they can and cannot list as tax-deductible expenses on their self-assessment. 

For a person new to running a business, making sure all tax information is correct can be intimidating, and they may be able to make more savings than they realise.

A way for you to support this would be to create a ‘cheat sheet’ for them so they can see what would be seen as an ‘allowable’ expense for their business.

You might start by clarifying that any cost they incur for the business, as long as it is ‘wholly and exclusively for the running of the business, then it can be tax-deductible. This way when they are paying for a cost, they can quickly reference the sheet to consider if it was ‘wholly’ for the business operation, before keeping the proof they’ll need for the tax return.

You might also want to include a list of common expenses for the client, such as:

• Office supplies
• Travel and parking expenses
• Petrol expenses
• Utilities
• Uniform and laundry costs

On this ‘cheatsheet’ you might also want to include advice on what they need to keep receipt wise for their expenses. Let them know how to store and file them, in a way that works for both you and them, if you are working with paper receipts for your clients.

Your client could benefit from software that automates a lot of the time-consuming aspects of bookkeeping for them. Not only would it save them time, but it could also make your job as their accountant easier as you could access their financial data easily if it was compatible with your existing systems.

Recommend to your client a few software programs or apps that suit their needs. Take into consideration:

• Any budget the client might have
• The functions that the software offers
• Will this save the client time and effort?
• How digitally literate are they? Will the client struggle to maintain records on a complicated app or would they prefer something that you can mainly manage, with small input from them?

HMRC will accept digital copies of receipts as proof of expenses. So if your client is struggling to find all their paper receipts and paid invoices, then recommend to them that they can keep scans or images of receipts instead.

Perhaps they can put aside fifteen minutes every week to scan their expense receipts or recommend that they take a picture of each receipt on their phone right after they pay for something. This way, you can recommend a method of filing/storing their paper receipts and they will have a backup digital version in case anything does slip through the cracks.

Some apps, like Countingup, feature a receipt capture tool that prompts a user to take a photo after they use the business card for a transaction.

Recommend to your client that they should be using a business current account card for all their transactions. Avoiding using a personal card will ensure they don’t have to pay themselves back through business funds and streamline their bookkeeping.

If the client still uses their personal bank account for business purposes, then organising their expenses can become confusing and complicated, as they attempt to sort the personal transactions from the business ones. Even using statements to try to match up purchases with receipts will become a long-winded process.

Using a business current account with a card means that every transaction on the statement is for business purposes, and it will be easier to identify the transactions where receipts or invoices are needed to expense a cost. 

Countingup gives the user a card for their business account, so all business transactions are recorded immediately on the real-time app. The app also saves the client time doing bookkeeping admin manually on a spreadsheet by automating the categorisation of transactions, which we’ll come to next.

When managing your client’s accounts, you’ll want to ensure they have set categories for their expenses that they can’t get confused with. 

For example, when they are travelling a lot for business, do they record their petrol costs in ‘travel’ or ‘vehicle expenses’? Make it super clear what is expected in each category, so if they are assigning each transaction a category, it’s easy for them to manage without getting muddled. This will cause you both to lose time later, having to untangle any confused entries in the books, if they are keeping track of transactions via a spreadsheet.

Make sure there are enough categories and they are specific to your client’s activities. For example, separating petrol costs from other ‘travel’ costs may be beneficial to monitor how much is being spent in this area on an ongoing basis. Doing this for other areas, such as office supplies, or operational costs, will allow you to highlight areas where savings could be made to your client, to improve their bottom line.

You can save your practice time on manual admin and help your clients keep organised records with Countingup’s free accounting software. It’s built specifically to help you manage your self-employed and sole trader clients.

The app automates time-consuming bookkeeping admin for your clients so they can focus on running their business—and send you accurate, structured data to work from. 

Countingup’s accounting software is MTD-compatible and full of features for you to efficiently review and manage client accounts with direct access to their real-time organised data. Find out more here.