3 Quick and Simple Steps for Business Expense Tracking
Only someone who has spent hours sorting through business expenses understand the need of a good business expense tracking model. Step up your business expense tracking game with these 3 quick steps.
Accounts and business finances are not hard to manage, but they are not fun either. It is extremely important for an organization to have a tight grip on the cash flow. Business expenses are the necessary costs that are incurred to run an organization. Tracking them is a matter of great stress and duress. Taxation days, in particular, can be a nail-biting affair for most business. Understanding how to properly track expenses can ease the pain of business owners. But with these three steps, you can make your expense-tracking for your small business simple.
Use a Separate Bank Account
It is easy to use a personal account when you are starting a business. But it can be a pain in your accounting later. So, to make a distinction between your personal purchases and business-related purchases, use a separate bank account.
A business account is not a separate entity of capital. It is still your money, but it is accessed separately. This gives you the freedom to manage your business expenses, especially, if you wish to scale your business or hire a bookkeeper. Every transaction on this account can be closely monitored and tracked.
Use this account to recognize all kinds of business expenses, including travel. It is important to take account of everything you spend on your business. From the flight you take to the car you rent to the cost of the trolley at the airport. Note everything in the business account.
Track Your Daily Receipts
Use a cloud bases expense tracking software to track daily expenses. The money you spend every day for your business is what culminates over time into your balance sheets. So, to manage business expenses efficiently, it is important you track everything on a day-to-day basis. Set up reminders to avoid missing daily payments.
Keep a keen eye on your recurring payments. They seem like a small amount but can make a huge dent in your overall profit. A good expense tracking software allows you to record every transaction. This means, all your receipts are stores in a cloud-based expense tracking software. Storing all your receipts is extremely handy during filling, payment collection, and tax rebates.
Daily receipts are not just client related. Everything from purchasing stationary to a casual business travel should be included. Business tracking software like CloudBooks allow you to directly record all receipts. It also comes with a time tracking tool to make sure you get paid for every hour of work you put in for a client. All this is good practice to follow for an organized approach to business.
Also Read: 3 Steps for Tracking Your Business Monthly Expenses
Analyze Your Purchases
CloudBooks saves all your transactional history and receipts in a cloud database. Along with that, it offers you various tools to analyze your business expense. With CloudBooks, you can track your overall expenditure, personal capital, monthly expense, and much more. You can schedule monthly analytical reports that calculate the highs and the lows of your monthly expenses.
You get monthly reports with which you can assess what is profitable for your business and what is a liability. It helps you organize your recurring expenses, and makes tax season a smooth ride. Not every business purchase is particularly smart, you will be surprised to find how much money you simply waste, even as a small business.
