One of the hardest aspects of running a business is managing the finances. Yet, tracking expenses and accounting for everything you do doesn’t have to be hard if you have an expense tracking system.
Here are five simple steps on how to track business expenses.
1. Start by Opening a Business Account
One thing you must do when you start a business is open a separate bank account from your personal one. You need an account which you’ll be using to carry out all transactions related to your business.
Having a separate business account enables you to track all your expenses easily.
2. Understand Your Current Expenses
You must understand all the expenses your business needs to pay for the month, including the recurring and monthly expenses.
Note down your rent, utility bills, salaries, credit card payments, among others. Look at your month’s bank statement to see how much you spent on each expense.
Compare the amount you spend every other month versus your income. This way, you’ll know if your business brings in good revenue or your expenses exceed your income.
3. Learn How to Track Business Expenses With an Accounting Software
Thanks to technology, you don’t need any accounting experience to be an accountant for your business. There are various business expense software applications that you can use to track your small business expenses.
You don’t need to rely on cumbersome old-school methods of accounting, such as the use of ledgers and spreadsheets.
There are many apps and online services that are more accurate, efficient, and reliable. One of the most common accounting softwares is QuickBooks. It helps track your income, expenses and pay your taxes.
4. Make Use of Business Credit Cards
There are many ways your business can benefit from the use of credit cards. Credit cards will make it easy for your business to access financing necessary for running the daily operations of your business.
You can use credit cards to track your expenses and record everything in real-time. You can also use a business debit card to purchase goods from stores easily.
Find the best virtual debit cards you can use for your business purchases and even get cashback offers.
5. Don’t Be Afraid to Change
When you start tracking your expenses, you might come across a few habits that are not good for your financial well-being.
Take a look at those habits you’re not so proud of and start looking for room for change. Consider eliminating unnecessary business expenses from your budget and direct that money to your savings instead.
Now You’re Ready to Start Tracking Business Expenses
Learning how to track business expenses is a walk in the park. Tracking your expenses is an important part of running your business, and you should never postpone it.
Implement the above steps and take control of every coin that comes in and goes out of your business.
Are you interested in more helpful information on running your business and managing your finances? We have everything you need on this site.
