Tracking business expenses might seem something as complicated as quantum physics if you don’t have the right tools in your kit.
These are the tools that enhance your money management habits, tools that minimize your tracking efforts. Without these tools, you are nothing but an unequipped warrior on a battlefield.
Managing your business expenses can help you in ways that you would not have imagined. For starters, you will be able to understand your spending behavior more closely.
You’ll be able to plan and execute money managing decisions accordingly. Moreover, you will develop a healthy financial habit, which is like a cherry on top. As a small business owner, it becomes quite necessary to increase profitability by taking these financial baby steps.
You’ll be glad to know that tracking your business expenses will also make the taxation process a lot simpler than it is. If you track your expenses regularly, you’ll be able to not just avoid potential deductions but also will be able to save some taxes eventually.
In this article, we’ll cover for you, not one, not two, but four easy-to-follow tips to track your business expenses:
- Create Business Financial Accounts
- Store and Manage Receipts Neatly
- Digital Receipts
- Create a Spreadsheet
- Make use of an optimum Cloud Accounting Software
1. Create Business Financial Accounts
Maintaining a balance between personal and business finances can seem like a hectic process for small business owners and freelancers. If not thoughtfully planned, everything can go haywire when the time comes.
This is exactly why you need to open business financial accounts. It will assist you in tracking business-related expenses with ease. You can use your business accounts for all your business purchases.
This will save you a lot of time as it will simplify the entire process of organizing your finances. You’ll have to open a business savings account, and need to have a business credit card.
Platforms like PhonePe, Google Pay, and many more encourage us to avoid using cash for payments, whenever possible. The thing is that cash is easy to spend and equally hard to track.
But a digital transaction is something that has a record in your bank statement, making the process super-easy to track.
2. Storing and Managing Receipts Neatly.
Maintaining store receipts is a beneficial habit as it helps you to track your expenses more closely. Here are some of the ways that can help you in storing receipts properly.
- You can keep a dedicated separate envelope with you for storing paper receipts. If managing time for this task consistently is important for you, you can set aside time every week and schedule filing your receipts accordingly. Adding a reminder through the calendar can also be helpful as this would be a recurring task.
- File folders can be of big use to you as they will help you in not just storing your receipts but also sorting them in the way you want, in the types of categories you want. For example, you can file your receipts according to the months, or as per the type of the expense, or even by the amounts of the expenses. In long run, this will leave you with a clear idea of your expenditure, which is a crucial thing to know for a business owner, big or small.
- If you have got lots and lots of receipts that it becomes difficult to manage and categorize, then binders can be helpful to you.
It is always great to keep a track of these receipts so that you can trace them back to your calendar to figure out each move in the past.
Remember that keeping your paper receipts and even bank statements intact becomes very important as it supports documentation of every event that took place.
3. Digital Receipts
Online transactions have revolutionized the world of finances. The digitalization of receipts has made storing and managing receipts super easy. With digital receipts stored in the cloud, you can access and track your expenses at any corner of the world.
4. Create a Spreadsheet
If there is one facility that has changed the way to manage, sort, organize and even present data or information, then it has to be spreadsheets.
You can make spreadsheets easily with Google Sheets or MS Excel. To create your spreadsheet from scratch, you will have to track every expense throughout the day or whatever your time is.
Here’s the best part. The tools you get with these applications let you categorize and sort them into any form you like.
Spreadsheets help you to sort out your data perfectly. For example, you can add expenses, track them, and import the spreadsheet into your accounting software.
5. Make use of an optimum Cloud Accounting Software
According to a global survey, by 2021, more than 90 % of small businesses will begin using cloud accounting software as the majority of the users expect this process to happen with a touch on their cell phones.
Even for freelancers or small business owners or entrepreneurs, having dedicated software for bookkeeping and expense tracking is such a blessing.
Who doesn’t like to access a network of information with the touch of a finger? A full-fledged cloud accounting software also helps small business owners to add their expenses within a snap.
What’s great about this software is that it also lets you connect to your bank account and credit card. In this way, you don’t have to regularly update your expenses as they will get updated automatically. This is how digital or cashless transactions build an upper edge over cash transactions.
All you got to do is follow these 4 simple tips and have solid tracking, accounting, and bookkeeping software, and Voila! you would save a lot of your time and also could focus on bigger things without worrying about tracking your every transaction manually.
How ProfitBooks can help you?
If you have to track multiple employees’ expenses, if you travel often for your business needs, if you find it hard to manage your business’ cash flow, then you need optimum accounting software.
ProfitBooks is one of the fastest-growing, leading, and reliable online software in the world of accounting. With ProfitBooks, you can’t just track expenses but also manage inventory, create invoices and do a lot of things online.
And that too for free!
What’s amazing about ProfitBooks is that it is user-friendly, full-featured, and also has a simple and beautiful interface.
Moreover, it has a mobile application too, which makes your accounting on the go!
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