There are a lot of different things to think about when you’re running your own business. One of the most important, but often overlooked, aspects is keeping track of your expenses. If you’re not careful, you could end up spending a lot more than you bargained for – and that’s definitely not good for your bottom line.
Whether you are struggling to balance your budget with repayments or worried your debts have been sold to a collection agency, the below tips will help on how to stay on top of your business expenses.
Keep business and personal expenses separate
This is basic advice for any business owner, but it’s important to reiterate. Keeping your business and personal finances separate will make it much easier to track your business expenses. Have a dedicated business account and business credit card that you use exclusively for business expenses. This will make it easy to categorize business expenses and track spending.
Use accounting software
Using accounting software is one of the easiest ways to keep track of business expenses. Accounting software can help you categorize expenses, track spending, and generate reports. This will give you a clear picture of where your business is spending money and where you can cut costs.
Create a budget
Creating a budget is another key way to keep track of business expenses. When you have a budget, you can track actual spending against your budgeted amount. This will help you identify areas where you are overspending and make adjustments accordingly.
Review expenses regularly
Reviewing business expenses on a regular basis is crucial to money management. This will help catch any errors or discrepancies and make sure the business is on track. Catching errors early can save a lot of money in the long run. For business owners, it is important to be mindful of where money is being spent. Keep track of business expenses in a way that works for you, whether that be through a physical ledger, an Excel spreadsheet, or software designed for business accounting.
Hire an accountant
If keeping track of business expenses feels like too much work, you can always hire an accountant. An accountant can handle all of the financial aspects of your business, including tracking expenses. This frees up your time to focus on other aspects of running your business.
Use expense tracking apps
There are many different expense tracking apps available that can make it easy to track business expenses. These apps can be used to track business spending, categorize expenses, and generate reports. This is a great option for business owners who want to keep track of their expenses but don’t have the time to do it themselves.
Keep receipts and invoices
Keeping business receipts and invoices is important for two reasons. First, it will allow you to track business expenses. Second, it will provide documentation in the event that you need to file a business expense report or claim a business deduction. Make sure to keep all business receipts and invoices in a safe place so you can access them when needed.
Understand business tax deductions
As a business owner, it’s important to know what business expenses are tax-deductible. This will help you save money come tax time. Common business deductions include office expenses, supplies, travel, and entertainment. Speak with a tax advisor to ensure you are taking advantage of all the business tax deductions available to you.
Have separate bank accounts
Another way to keep track of business expenses is to have separate business and personal bank accounts. This will help you keep business and personal finances separate, which will make it easier to track business expenses. Having separate bank accounts will also help you stay organized and avoid mix-ups.
Use a business credit card
Using a business credit card is a great way to track business expenses. When you use a business credit card, you can easily categorize business expenses and track spending. This will give you a clear picture of where your business is spending money and where you can cut costs. Plus, most business credit cards offer rewards and cash back, which can save you money.
By following these tips, you can easily keep on top of your business expenses and make sure your business is running as efficiently as possible. Tracking business expenses may seem like a lot of work, but it is crucial to the success of your business. Taking the time to track expenses will help you save money and keep your business on track.