Whether it is an IT company or a manufacturing unit, you will have to learn how to track your small business expenses if you want to achieve success. You may use different methods to track business expenses, but in order to manage your accounts adequately, you’ll need to create a streamlined business expense tracking system that works.
Tracking your business expenses will give you cost control and saves time while taxation and streamlines the entire operation. In this article, we’ll tell you how to track your small business expenses in simple steps. So, are you ready for this? Let’s go!
- Start With Opening Business Financial Accounts
If you are a freelancer or just started a small business, you might find that line between personal and business accounts blurry and overlooked. Let the tax time come, and you will be dancing here & there, looking for business expenses among your grocery and clothing bills.
Make it simple, and open a business financial account so your business-related expenses will be precise. Also, make all your business-related purchases from that account. You can also apply for a small business credit card.
The entrepreneur advises avoiding cash because it is hard to track and only has receipts as a backup. Therefore, open business account is better for your business, better for tax time, and undoubtedly better if you get audited using your credit or debit cards. That’s how to track your small business expenses at ease.
- Store Receipts Properly
We can understand that it is challenging to store receipts, you’ve to do, especially if you make purchases in cash. Here are some quick tips for storing receipts. It is the second most crucial factor to learn how to track your small business expenses.
- Always keep a separate envelope in your purse for business receipts
- You can also use file folders to store receipts and categorize them on a monthly basis or accordingly
- Use binders. Get plastics sleeves and plan categories to make it simple for tax day
Also, don’t forget to write the purpose of the purchase at the back of every receipt. It is a good idea to keep track of your business expenses in the smoothest way. If you are concerned about storing your receipts digitally, here’s how to do it;
- If you buy something online, it will have a track record in the app
- You can also capture screenshot and upload on your clouds
That’s how to track your small business expenses in coordination with emerging technology!
- Make A Spreadsheet
Though technology has reached almost everywhere in the world, some people still love doing their job as they were doing earlier. So, if you are looking for how to track your small business expenses and have a low-tech approach, you can simply make a spreadsheet. They are also easy to import into your accounting software. You can create a spreadsheet in Excel or Google Sheet using the following columns;
|X-Jan-2021||PC||SDAD Technology||$2,383||January PC Bill|
You can also try the following categories;
- Client meals
- Rent, mortgage, or utility
- Travel expenses
- Get An Accounting Software
This is not a tip. Instead, it is a permanent solution for tracking your small business expenses. There are thousands of accounting software, and it is your choice about what kind of accounting system will meet your requirements.
According to reports, more than 90% of small businesses will be using cloud accounting software by 2023. A valid reason for this blooming is that most owners want to access their accounting data on their cell phones.
Accounting software allows small business owners to add and track expenses anywhere, whether traveling or meeting a client. That’s perhaps the best solution for how to track your small business expenses.
Whether you’re just starting, are in the process of incorporating your business, or just looking for some genuine startup funding options, you must take into account these tips to track your business expenses.
While it is as important as other aspects of successful business practice, take a few minutes and put a plan in place that allows you to track your business expenses efficiently & accurately.