Business expenses are part of the daily routine when it comes to running a company. Whether it is utility bills or buying inventory, you must spend money. Tracking these expenses helps you understand your spending behavior, cut costs, and plan for tax times ahead.
Suppose you have spent time sorting through credit card charges and paper receipts to figure out how many of your purchases were business expenses. In that case, it is time to step up your organizational capabilities and devise a system for tracking the expenses in real-time. Here are a few ideas to help you develop a better expense management system.
Create a Separate Business Bank Account
Often, many sole proprietorship businesses have not prioritized segregating their personal and business accounts, which can result in a lot of confusion. Separating your business and personal accounts should be a top priority for any business. This is so that business-related purchases and payments will move through a separate account from the beginning, which makes 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 easy to use for everyone. You do not have to be an expert to make use of these bookkeeping tips. 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 greatly helps in better decision-making. Because you always have access to updated information about business expenses, 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, and 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 the tracking of 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. It can be hard to keep track of the accounting tasks, among other important business requirements, as a business owner. Having a professional manage your bookkeeping needs will ensure that everything is on track when it comes to handling the finances. Though, 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, do not forget to include one of your major expenses: labor. Ensure that you are properly tracking the cost of wages, benefits, overtime, and other costs related to your employees. By accurately determining the costs of maintaining a workforce, you will be able to decide if they need better incentives or if you are overspending the budget. Whatever the case, tracking business expenses is undoubtedly going to help you with better decision-making regarding the management of your labor force.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 platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO 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.