Business expenses are the things you spend money on to run and grow your business. It’s important to keep track of expenses so you know how much you’re spending. You can also compare what you’re spending with what you’re earning to know how your business is going.
Also, if you’re registered for GST, you’ll want to keep track of your expenses to help with your tax reporting.
Business and personal expenses
A business expense is something that relates completely to your business – like the cost of advertising. But a personal expense isn’t business-related, like going to the movies after work. And some expenses are a bit of both – like the petrol in a work car that you’re using for a weekend away.
If an expense is both business and personal and you’re registered for GST, it affects how much GST you can claim.
In most cases you can claim back the GST that’s included in a business expense. But if you buy something and part of it’ll be used for private purposes or a non-deductible business expense, it’ll reduce the GST credit you can claim.
What is considered a business expense?
Business expenses are usually anything you spend money on to start, run or grow your business. They include things like office equipment and rent, machinery, or retail stock. They can also be things like advertising or business insurance costs, or the fees on your business bank account.
Having a record of your business expenses will also come in handy at tax time to help work out your deductions.
Also, if you’re registered for GST, you can usually claim back the GST on your business expenses.
Here’s some helpful information on the ATO website:
Tax deductions and business expenses
A tax deduction is something that reduces your taxable income – so you pay less tax. You may be able to claim tax deductions for expenses related to starting, running and growing your business. That’s why it’s a good idea to keep track of anything you spend money on for your business.
Learn more about business tax deductions on the ATO website.
Expenses help you keep a record in one place
Using the app to manage your expenses means you’ll have a record of everything in one place. Store your receipts and supplier bills in the app instead of stuffing them in a drawer or losing them in your inbox. Have valuable information at your fingertips, like what you’ve paid, when you paid and what’s due soon.