Use more words and save money!
Here’s a thing, and we’ve all done it – you go out for a business meeting; park the car, realise you’ve left your notebook in the office and pop into a newsagent for another, pick up some gum or fags while you’re in there, buy a coffee while you’re waiting for your contact, and once you get back to the office you throw the handful of receipts into the folder or box-file ready to do your bookkeeping at the end of the week/month/year.
And how much sense are you going to be able to make of those bits of paper in 12 months time? £2 car-parking ticket in the middle of the day, £9.00 in WH Smiths, £4.95 in Costa – what was all that about then? Looks remarkably like a personal errand doesn’t it?
So – write it down! Don’t keep a separate list (what are you? A glutton for admin?), just write a brief note on each receipt while you’re waiting for your business contact in Costa’s, or when you empty your pockets at the end of the day.
Believe me, it pays. What’s your bookkeeper or accountant going to do about it otherwise? Raise a query with you, charged at their hourly rate? Put everything down to legitimate expense, and risk their reputation in the event of an HMRC inspection? Put everything down to ‘personal expenditure’ and lose you money?
And the above example – what’s it worth? £9.95? Overlook that amount a couple of times a week, and that’s over £1000 you’re not claiming as an expense over the course of the year, potentially costing you and your limited company about £400 in tax between you.
And here’s another thing – write the note in real words would you? Not in abbreviations – your bookkeeper won’t thank you for asking them to decipher endless occurrences of “Ntbk”, “Pkg” or “Cfee”. We can tell it’s coffee, it’s a receipt from Costa. Write “Meeting with Bloggs&Co” on it – use more words, it pays in the long run!