All You Need to Know About Sundry Expenses
Sundry expenses are small, irregular costs that pop up sporadically. This means they can be easy to overlook but have a significant impact on your business’s finances. From minor office supplies to unexpected fees, these expenses often slip through the cracks, leading to incomplete records, forecasting challenges and potential budget issues.
For small to medium-sized businesses, accurately managing and documenting these costs is crucial for maintaining financial clarity and preventing discrepancies. In this article, we’ll explore what sundry expenses are, the challenges they pose and how effective tracking and automation can help ensure you stay on top of these often overlooked expenditures.
What is a sundry expense?
Sundry is a term used to describe miscellaneous or infrequent expenses that do not fit into specific, regular accounting categories. For example, a sundry expense could be:
• Office supplies: Infrequent purchases of pens, paper and staples could be considered sundry expenses if not purchased on a repeat order.
• Maintenance: Laptop repairs, car maintenance, new light bulbs, or any other surprise costs related to keeping your business running are classic sundry expenses.
• Travel expenses: Small or unplanned travel expenses not covered under regular travel budgets that need to be expensed but aren’t part of standard budgeting.
• Training: Some companies have regular training budgets. However, it’s common for businesses to approach training on an as-needed basis. In these instances, these costs normally end up grouped as sundry expenses.
• Surprise fees: Bank charges for irregular transactions, ad hoc increases to software subscriptions or any other unplanned additional cost could all be considered sundry expenses.
The challenge here is two-fold. First, these expenses cannot be planned for in the same way as regular operating costs. Second, they often have crossover with regular accounting categories. Not only is it challenging to track and document sundry expenses, but it’s difficult to accurately categorise them to get a clear picture of your overall business expenses.
How should sundry expenses be categorised?
How you categorise sundry expenses has a big impact on how you are able to manage them - and you usually have two options when it comes to categorising them. The first is to simply treat “sundry” as a single, overarching category. The second is to then subdivide your sundry expenses into additional categories that describe the type of expense in question.
Simply looking at all sundry expenses as a single category is the easier approach. However, this strategy does not provide you with the same level of clarity over how money is leaving your organisation and it can damage your ability to forecast future expenses. Ideally, you need a system in place that will allow you to capture all sundry expenses as a single category, and then add additional tags to help you understand the types of sundry expenses that you’re incurring.
To set up basic sundry expense categorisation, you need to:
1. Create a separate account for sundry expenses: By setting up a distinct account for sundry expenses, you make it easier to track “sundry” as an overarching category. This allows you to track this overall category simply by checking that account.
2. Set a threshold for qualifying as sundry: Technically, any ad hoc expense could be considered a sundry expense. However, identifying a threshold for sundry expenses ensures that these expenses don’t get out of hand. Most small businesses set that threshold at £100, while larger businesses might expand that ceiling to £200-£500.
From there, you then need to review and categorise sundry expenses when they are invoiced. This will allow you to get a clear picture of the specific types of expenses you're incurring, and make more accurate projections about these costs in the future.
The challenges in managing sundry expenses
Due to their irregular nature, there are a variety of challenges that come with managing sundry expenses. Manually tracking and categorising expenses is a risky and time-exhaustive process that diverts attention away from more strategic financial tasks. On average, financial teams spend 42% of their time tracking non-payroll spending, a large portion of which are sundry expenses.
Moreover, inaccurate tracking of sundry expenses can damage overall accounting accuracy and lead to unexpected budget shortfalls, poor financial planning or compliance failures. Common challenges that create these issues include:
• Submission of expense claims: The unplanned nature of sundry expenses can create challenges for employees looking for reimbursement. Those employees may not be used to submitting expense claims, or be unclear on the documentation required. It’s recommended that you have a clear and easy-to-follow employee expense policy, and make it simple for individuals to capture receipts and other documentation in a timely manner.
• Approval of expenses: Having ad hoc expenses can cause bottlenecks in approving those if the relevant managers aren’t aware the expense claim has been submitted. It’s important that you are able to notify the right people to review any claims and approve or deny them in a timely manner.
• Categorising sundry expenses: It’s critical to ensure that only appropriate expenses are categorised as sundry, and then you’re able to effectively break down different types of sundry expenses.
In summary, managing sundry expenses depends on having an effective expense management policy in the first place. This becomes more important because of the ad hoc nature of such expenses.
You also need to consider how frequently you need to report on sundry expenses and analyse those outgoings. Increasingly, accounting and bookkeeping teams are under pressure to provide real-time updates on expenses and budget forecasts. Achieving instant visibility over sundry expenses compounds the need for automation to streamline and accelerate your expense management policy.
Applying automation to simplify sundry expenses
Technology transforms the way you manage your sundry expenses by bringing real-time tracking capabilities and improving overall efficiency. Critical features you should look for in your chosen bookkeeping automation software include:
• Receipt scanning: Bookkeeping automation apps allow employees to scan receipts using their phone camera and directly submit that documentation on the go. This reduces the risk that receipts are lost and/or incomplete records submitted while simplifying the process for employees.
• Automatic categorisation: Automation tools use advanced algorithms to categorise expenses accurately. By setting up rules about cost thresholds and different expense categories, all sundry expenses can be tagged appropriately and automatically to give you maximum visibility over expenses.
• Approval alerts: The same tools used to scan and categorise expenses can be set up to alert managers to approve expenses. This allows sundry expenses to be reviewed faster, ensuring employees are quickly reimbursed and accounts are kept up to date.
• Real-time reports: Bookkeeping automation tools can then collate all of this information into on-demand reports and dashboards that allow you to stay on top of expense claims and their impacts on your budget.
Bookkeeping automation is dramatically improving the efficiency of overall expense management for business owners and finance managers. However, the impact on sundry expenses is particularly noteworthy. By making it easy to capture and submit expenses, and then automating the categorisation and approval process, it’s possible to achieve real-time visibility over ad hoc expenses while maintaining clear and accurate accounts. Plus, it'll positively affect your business planning and forecast.
Trust Dext to fully automate your company’s sundry expenses
Automation transforms the management of sundry expenses from a tedious error-prone process into an efficient, accurate and compliant financial practice. Achieving this outcome for all expense management tasks is central to why we built Dext. Dext offers effective and efficient automation for sundry expenses and all of your other bookkeeping needs.
Being able to easily manage every expense, no matter how small, is very helpful for any busy entrepreneur. In some countries, it can even help you identify opportunities to save money - as Nathan Ladovsky, from United Bakers, discovered:
“Previously, we weren’t doing a good job of keeping track of the taxes we pay on small expenses and transactions. Here in Canada, you can count those ITCs [Income Tax Credits] against your sales to reduce your tax bill because all these small transactions might have a $1 or $2 tax charge – it adds up! Dext allowed us to have a more granular view and keep track better, reducing our overall tax bill.”
Meanwhile, in Australia, Angela and Graham Sweeney from Transforming Homes and Gardens remember well how difficult it was to keep track of expenses from the whole team:
“I would end up with all these receipts and no idea of who purchased what, and I was unable to ask questions about certain expenses. It was a very lengthy and painful process. With Dext, you simply take a picture, throw the receipt in the bin and you’re good to go. Your focus is back on the job, not on paperwork.”
As you can see, an investment that saves time, money and makes life easier is a no-brainer. Forget about tracking your expenses manually and chasing receipts: Dext has all the features you need to fully optimise your processes.
With the Dext app, our employees can turn their phones into receipt scanners, making the submission process easy, convenient and highly accurate (although paperwork can also be submitted via email, drag & drop and many other methods). All the information you need from their receipts and invoices will be automatically captured and categorised in a matter of seconds with the highest accuracy in the market - keeping your financing teams on top of all one-off and irregular payments.
Book a demo to see Dext in action day or start a free trial to streamline your expense management today!
