Tracking your expenses is a fundamental task in owning and growing a business. Taxes are easier and more accurate. Lenders and investors are more likely to share funds with your business. Fraudulent or careless spending by employees is less likely to occur.
This article shares tips for tracking your business expenses. If you have questions, please reach out. Use the form at the bottom of this page to contact us.
This is imperative. Tax issues can arise, and the disorganization of finances will occur if personal and business expenses are combined.
To make the separation of the two easier, utilize a software application for tracking. QuickBooks, FreshBooks and other accounting software can help record business expenses but for internal purposes.
As your business grows and more people need to spend company funds in their roles, using an app with an easy-to-use interface is essential (i.e., no background in accounting or finance is required). This app should be able to integrate with your company’s accounting software too. If you need suggestions for mobile apps everyone in the company can use, reach out. We have worked with many.
Educate team members about the categories of business expenses. Make it clear from the start what services and products are deemed business expenses as opposed to personal. From there, get specific about the various kinds. Some business expense categories include – office supplies, rent or mortgage payments for offices and warehouses, entertainment (not tax-deductible but should be tracked), business meals and travel, and payroll.
Also note, knowing different categories of expenses helps you and team members to further understand the differences between personal and business expenses.
To have accurate knowledge of expenses and to determine how organized they’re being tracked, check regularly. Internal audits help ensure departments, as well as individuals, are tracking their spending correctly and honestly.
Morgan & Associates are Here to Help with Tracking Expenses
Do you have questions about tracking business expenses? Are you unsure if a particular expense can be deemed a business expense? Is your company looking for an easy-to-use app so team members can record their expenses in real-time?