5 Business Expenses Every Accounting Manager Forgets to Budget For


Finance Insights for ProfessionalsThe latest thought leadership for Finance pros

Thursday, March 17, 2022

Small expenses can really add up in the long term, so it’s crucial to be mindful of them when creating your budget.

Article 4 Minutes
5 Business Expenses Every Accounting Manager Forgets to Budget For

Accounting managers are responsible for many things, not least checking and double-checking where company money is going to ensure maximum efficiency.

But while it's vital to stay on top of big expenses such as salaries, vacation pay and client payments to avoid blowing the budget, there are other day-to-day business costs that can end up being placed on the back burner in terms of being monitored and chased up.

Among the most common of these are the things employees are able to claim back as expenses. While the odd dollar here and there may not seem like much, these claims can really mount up over the course of a year - and if they're not properly budgeted for, they could become a major headache come the end of the financial year.

Here are five forgotten expenses you might need to take more notice of:

1. Bank charges

There are few banks left these days that don't charge fees on everything from business accounts to company credit cards, with these charges varying depending on the institution. Although the cost of banking for business purposes should be tax-deductible, it's essential to budget for it upfront.

Another potential expense here is the fee your company will need to pay if you accept credit cards from customers, which is usually around 3% of the total charge. This can have a big impact on cash flow and it may be worth looking for cheaper methods of transaction to keep costs down.

2. Business equipment

Every company will have budgeted for its initial office set-up, but what about the day-to-day maintenance of that arrangement? Equipment will need to be purchased more regularly than you might think to stay on top of business operations, whether that's routers, mice and modems or subscriptions to Microsoft Office, so setting cash aside is going to be essential.

Also, it’s important considering the increasing number of people wanting to work remotely going forward, as their workstations will still be a business expense.

According to a recent report from McKinsey Global Institute, 38% of businesses expect their employees to work from home two or three days a week after the pandemic, which could be up to four times as many as before.

Their laptops, software programs and even ergonomic desk set-ups will be a business expense there just as much as they are in the office.

3. Parking and business travel

It's easy to forget that your company parking lot is costing you money, until employees arrive at the end of each month wanting to be reimbursed. Similarly, the cost of business trips can really add up to a big bill after even just a few client meetings.

Speaking of the latter, it looks as though global travel pricing for air, accommodation and ground transportation is only going to increase in the coming two years too. According to CWT and the Global Business Travel Association, hotel prices could go up 23% by 2023, while car rental may go up 6.9%.

Although these expenses are tax-deductible, they still represent a large sum of money that should be accounted for ahead of time.

4. Petty cash

It seems an outdated concept to consider in our tech-savvy world, but the reality is that most businesses still have a petty cash fund for those 'just in case' costs - and if several people are dipping into it, accounting managers may find themselves having to set aside a considerable amount per year to cover the kitty.

Maintaining a detailed log of receipts and payouts is crucial to ensure compliance with company policies and reduce discrepancies in the books, something a dedicated app or petty cash management software program may be able to help with.

5. Marketing

Marketing budgets should stand at around five to 12% of total revenue, although businesses in the B2C sphere tend to spend more than those with a B2B focus.

But is your company taking into consideration everything that counts as marketing? For example, a website is a marketing and advertising tool and therefore its hosting and development costs count as a business expense.

Web FX states routine website maintenance ranges from $35 to $5,000 per month alone, a cost that should be factored into the budget to prevent overspending.

On a similar theme, inclusion in service directories and the cost of designing, writing and producing advertisements can often be overlooked amid more obvious forms of marketing such as banner ads and email campaigns, yet could still hit your wallet.

As you can see, although much of the above list is tax-deductible, it will still need to be part of a business's budget if profits are not to be eaten into. Setting aside a 'miscellaneous expenses' fund may be one way of helping towards any overlooked expenses to ensure you're covered, just in case.

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