Keeping track of business expenses can be a frustrating process (to say least) when it doesn’t seem to add up in the way you’d expected but it’s an integral process to undertake in any business. By exploring efficient ways to track your expenditure, cash (ins and out)flow, and overall spending behavior, you’ll have a good update on your financial data.
That way you’ll be able to create comprehensible and audit-friendly financial statements which would hopefully lead you to make wiser business decisions. As well as being well equipped to ensure that you are maximizing your profitability levels, with minimal stress during the upcoming tax seasons.
Although every business has to keep track of their expenses, the type of business it is – (whether you’re self-employed or running a small business) affects the extent of difficulty in processing this.
The following are 3 tips on how to keep track of your business expenses for easing the process.
- Track Expenses as you Go
We are fortunate enough to live in a digital world where everything can be tracked and installed on a digital document that can be accessed through a wide range of technology from your standard computer to your smartphone. However, it’s imperative to keep track of your receipts and if you don’t then you need to start requesting them (whether it’s digitally or printed). This is important as you’re going to need to upload them to your tracker or potential accounting software.
Some businesses that have opened up business bank accounts may have a specific expense tracking app provided by their selected bank and these often include a feature of taking photos of paper receipts, making it more convenient instead of using a separate scanner. Regardless of what you are using, the main goal is to ensure that you are tracking ALL of your spending. This is for multiple purposes, whether it’s to give you better management of your cash flows or (equally as important) for tax purposes to ensure you are paying the correct amount of tax and prepping for audits.
- Hire an Accountant
This may seem like a cheap point-cover, but it has never been more true and important as it has before. When it comes to your business’s financial wellbeing, sometimes you need a professional who is specialized in the field to help you with monitoring and analyzing your financial performance.
Obviously, this is all dependent on how you feel about spending money on one and ultimately the size of your business. Usually offloading some of that work to a professional for a fee is worth it for not having the stress and hassle of doing it yourself, it will even mean that you’ll have accurate data with rare-to-no errors being made compared to doing it yourself. At least this way, an accountant can deal with the mundane tasks of properly preparing your financial records as well as identifying tax deductions that you will have most likely missed yourself.
- Invest in a Cloud Accounting Software
According to research from Accountex, more than 90% of small businesses will use cloud accounting software by 2021. The reason for this is because owners want to access their accounting data on other electrical products from tablets to their smartphones as I’m sure you would as well for your business. Cloud accounting software also lets small business owners add expenses on the go, making it more convenient than ever to track your expenses. With lots of other features, it makes it an efficient way to track your expenditure. The best part about investing in this cloud accounting system is that you can link it to every smart device (you have) meaning that no information will be lost as it’s maintained through a cloud-integrated system.