This Is How to Keep Track of Business Expenses

Did you know that many businesses spend between 80% to 97% of their revenue on businesses expenses? That leaves little room for profits and a high risk of businesses failing. 

Managing these expenses is crucial to running a business successfully. Are you an owner looking for business management and accounting tips?

The following guide will explain how to keep track of business expenses. Read on and learn how to manage your budget for small business success.

Business Bank Account and Cards

First, set up a dedicated bank account for your business. It makes it much easier to categorize and track expenses.

You also have to do this if your business is incorporated to write or receive checks in your business’s name. Sole proprietors don’t have to do this but it’s still great for managing expenses.

Try to use a separate card connected to the account for any business expenses. This way you’ll never have to go through receipts and separate out personal expenses.

Consider connecting your business bank account to your accounting software. Doing so will automatically import transactions as they happen. It makes the accounting process faster, easier, and more thorough.

Automatic importing eliminates the chance of missing a transaction. It makes it simple to categorize expenses and link them to their receipts.

Expense Management Software

Expense management software is great for business owners on the go. You don’t have to worry about keeping track of receipts or risk losing them while traveling.¬†Additionally, there are various top expense management solutions out there, which can help you simply your business expenses and more.

It’s also good for those with multiple employees. A spreadsheet system might be enough for a one-person operation but anything more requires extra budget tracking.

The software makes it easier for businesses to transition through growth phases as well.  It works well for managing multiple bank accounts or if you plan to add more accounts in the future.

Divvy is an example of software that helps manage expenses, protects from fraud, and reduces overspending. However, the best divvy alternatives work just as well and might pair better with your specific needs.

DIY Expense Management Tips

There are several things to consider if you forgo using accounting software or business bank accounts. It’s not impossible, but it does take extra work and attention to detail.

First, consider using a receipt scanner to digitize receipts. It makes it easier to keep track of receipts and keeps them from fading over time. Get in a habit of scanning recipes as soon as possible to avoid losing them.

At the very least, use an Excel spreadsheet to monitor spending and profits. Find a free online tutorial if you’re not already familiar with using Excel. Record all expenses in the spreadsheet promptly.

Review and categorize your expenses frequently. You’ll need to diligently manage expenses on your own if you don’t use software to do it automatically. Set aside time each week to go over your business spending.

How to Keep Track of Business Expenses

Now you know how to keep track of business expenses and what tools to use. Remember this guide to improve your current budget. You’ll limit expenses, increase your profits, and keep your business running.

Check out the rest of our site for more helpful business and finance tips.



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