Accurately tracking your business expenses is key for success, but it can seem intimidating to keep track of so much at once. Luckily, following these five tips can help you manage this daunting task. Here’s how to track your business expenses so you can have better insight into where your money is going.
Top 5 Tips for Tracking Small Business Expenses
1. Keep Business Expenses Separate
The best way to track expenses for any business is to keep your business expenses and accounts separate from your personal. When starting your business, it’s a good idea to go in the bank and open a separate checking/savings accounts for business-only purposes. This makes keeping track of business costs simple, as it naturally separates these expenses from your personal purchases.
2. Save All Receipts
It’s easy to forget what you bought at the store, especially if it was a while ago. That’s why it’s a good idea to keep all receipts for your accounting records.
3. Use Accounting Software
With all your saved receipts, enter them into an accounting software. Accounting software is relatively inexpensive for small businesses and is a great way to keep your finances sorted and organized. There are plenty of accounting software options to choose from.
4. Track Tax-Deductible Expenses
While you’re already tracking your business expenses, it’s a good idea to mark down your tax-deductible items as you go. This will allow you to stay organized and save money!
Common small business tax deduction items:
5. Review Financial Reports
Now that you’re tracking your expenses, use this information to your advantage! Pulling a monthly or weekly financial report from your accounting software can allow you to more accurately make financial decisions based off your past performance and expenses. Take a look at your balance sheets, profit/loss statements and more!
There are plenty of tools out there to help keep your business expenses organized. The above tips can be applied at any time and can quickly become a good habit to follow. Building a business takes hard work, money and time. Make sure your business is covered by speaking with your Farm Bureau agent today or check out our coverage options. Whether you’re a home-based business or a commercial business, we have what you need!