Business expenses are part of the daily routine when it comes to running a company. Whether it’s utility bills or buying inventory, you need to spend the money to make it. Tracking these expenses helps you understand your spending behavior, cut costs, and plan tax times.
If you have lost a week of precious time sorting through credit card charges and paper receipts to figure out how many of your purchases were business expenses, it’s time to step up your organizational capabilities and devise a system for tracking the costs in real-time. Here are a few ideas that will help you develop a better expense management system.
Create a Separate Business Bank Account
Often, many sole proprietorship businesses have not prioritized their personal and business accounts, resulting in a lot of confusion. Separating your business and personal accounts should be a top priority for any business. This priority is so that business-related purchases and payments will move through a separate account from the beginning, making it easier to track business expenses later. The use of a business credit or checking account is preferable in this regard. The business account will also build up a separate business credit score that is considered an essential factor by banks and other businesses to measure risk. Maintaining a good credit score will ensure that you are eligible for business loans and other services.
Use Online Tools to Track Expenses as they Occur
There are many online tools on the market that are quite handy and easy to use for everyone. You don’t have to be an expert to use these bookkeeping tools that cater to most of your accounting needs, such as tracking expenses. As soon as you get a receipt, the information can be put into the software, which can then be accessed at any given time. The expenses will automatically add up and show various other trends compared to your sales or income, which significantly helps in better decision-making. Because you have access to updated information about business expenses at all times, you are better positioned to strategize for the business according to your current situation.
You can set up alerts to remind you to pay future expenses before they are due. You’ll be able to print out the entire calendar for reference as tax time approaches. Some of these online tools, such as Google Calendar, can synchronize with your phone, enabling tracking business expenses on the go.
Hire a Bookkeeping Expert
One way to track expenses and handle all accounting tasks efficaciously is to hire an expert. As a business owner, it can be hard to check on all accounting tasks, among other essential business requirements. Having a professional manage your bookkeeping needs will ensure that everything is on track when handling the finances. It is suggested to hold a weekly meeting with the person in charge of your finances so that you will always know where your company stands. The right accountant will offer an honest valuation of your business finances and suggest a solid plan to reduce expenses. A bookkeeper that can help you stay out of trouble with the IRS is most certainly worth the investment.
Consider your Employee Costs
When tracking your other business expenses, don’t forget to include one of your significant expenses: labor. Ensure that you are correctly following the cost of wages, benefits, overtime, and other expenses related to your employees. By accurately determining the costs of maintaining a workforce, you will be able to decide whether they need better incentives or overspending the budget. Whatever the case, tracking business expenses will surely help you with better decision-making regarding your labor force management.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.