Business owners often dread dealing with anything accounting related. However, prioritizing your small business accounting tasks is vital to keep tabs on your company’s profitability, obtain the necessary details to file your taxes, and apply for financing.
Even if you hire an expert, you’ll need to maintain accurate records of your business financials.
Learning how to track business expenses is the first step to keeping your accounting records in top shape.
You might think it’s too difficult to do it yourself or requires expert knowledge, but that’s far from the truth. Want to learn how?
We’ve got you covered. Here are the best tips you should follow to start tracking your business expenses today.
1. Open A Business Account
If you’re only getting started, chances are you might be depositing your business income in your personal account. This practice won’t allow you to track your business expenses.
Yet, you can solve this issue by opening a business account. Even if you’re operating as a “Doing Business As” (DBA), you can open this type of account by providing a certified copy of your operating DBA.
2. Keep Digital Records Of All Your Receipts
Old school business owners often keep a shoebox full of receipts. While this practice helps you keep a record, you should digitalize them. It’s as easy as scanning your receipts and uploading them to cloud-based storage such as Google Drive.
Depending on your accounting software, you may be able to attach an image of your receipt to the matching transaction. You can buy a scanner or even use a smartphone app to start digitalizing your receipts right away.
3. Record Your Expenses Promptly
One of the most common mistakes in business expense record-keeping is not recording transactions right away. While you should always reconcile your account every month, you shouldn’t wait until then to start recording your expenses.
Consider implementing recording transactions promptly as a practice in your organization. This measure is vital to avoid any mistakes such as double entries in your business financials.
4. Harness The Power Of The Right Accounting Tools
Using the right accounting software is essential to record and maintain accurate records. However, these accounting tools will also help you track business expenses in your organization.
Today, platforms such as QuickBooks, Bench, FreshBooks, among others, offer mobile applications to make it easier for you.
If you’re getting started or have a limited budget, you may consider using Excel or Google Sheets which are a more affordable alternative.
Keep in mind you’ll also need to use an accurate paystub creator so you don’t include any reimbursed employee expenses on their gross pay.
Can You Track Business Expenses Yourself?
You can track business expenses yourself if you implement the best accounting practices. Consider an all-around approach from keeping a digital copy of all receipts to using the right accounting software for your business.
If you aren’t sure about the best practices, you may consult your accountant or bookkeeper for insight into the ideal business expense recording methods that fit your operations.
Did you find this article interesting? Keep checking the rest of our site to find more tips and articles on everything from business to lifestyle.