Four Ways To Track Your Expenses

Do you have an efficient system in place to track your expenses?

Expense tracking is important for several reasons, especially when it comes to knowing how profitable your business is at the end of the year.

Setting up a system to track your expenses consistently can prevent problems at tax time and help you cut costs proactively.

And, if you think expense tracking is too time consuming, it doesn't have to be.

Here are four ways you can track your expenses with more ease:

Move Your Accounting System To Cloud Based Technology

Move your accounting system or at least your expense tracking process to cloud based technology or an industry specific app to streamline your bookkeeping and financial management.

By moving your bookkeeping to the cloud, your accountant or controller can access all of the information they need to provide consulting and prepare your tax return. You can also connect your bank accounts to your online accounting software system. Once connected, your purchases and deposits automatically update with each transaction. It's a simple process for controlling and reporting that keeps you organized.

Keep Every Receipt and Bill in a Designated Folder

If you do this one step, you’ll be thankful at tax time. By keeping all your receipts in one place, you won’t be frantically trying to find the paperwork you need to claim eligible tax credits and deductions at the end of the year. I recommend organizing your receipts by category in an accordion folder or something similar.

Google Forms

You can use Google forms for free (requires a Gmail account). Create a digital expense tracking template with the categories of expenses defined and make a copy for each month of the year. Keeping your form or spreadsheet regularly updated with your expenses is a habit that will save you time in the long run. Having a visual representation of your expenses allows you to keep track of where you are spending so you can assess whether you are on track to achieve your financial goals.

Keep Personal and Business Receipts Separate

As much as possible, keep your personal expenses separate from your business expenses by filing them by category in separate file folders to avoid confusion. If the expense fits into business and personal categories keep track of this using a spreadsheet and keep it up to date throughout the year. Maintaining a record of your personal and business expenses makes it easy for you to reference and remember at the end of the year.

Do you need help setting up a budget or system to track your business expenses?

Schedule a free consult with an accounting solutions specialist now!