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Track It: A How-To Guide On Tracking Your Businesses Expenses

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All companies rely on money to grow their business, whether big or small. Accounting for all money spent and ensuring your company doesn’t use too much ultimately means the difference between profit and loss.

Expense management

Start by setting up an expense management system. The system allows us to track expenses and ensure that we keep accurate records of every financial activity that happens within your company.

There are many apps out there that can help you track your business’s expenses. Most tracking apps are cheap, simple to use, and will better organize all the data about your business’s costs. They also come with time tracking abilities, which can be invaluable in various circumstances.

Track your tax-accountable expenses through tax accounting (https://getdivvy.com/learn/tax-and-accounting/). You must file a tax return with your tax agency annually detailing all the money earned and spent. If not, you will receive penalties and additional charges from the government.

Manage receipts properly

Make original receipt copies in a proper format, double-check the information, and ensure the receipts remain consistent.

Keep track of all your expenses with receipts by adding them to the expense management system. Ensure your employees understand that an itemized receipt for any pending bill is required to get payment from the company.

Digitize your receipts using a receipt scanner. Receipt scanners will save time and ensure the information you enter is accurate.

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Digitizing a receipt will ensure you have the most up-to-date electronic copy of all your receipts and expenses, even if you lose them. Avoid having extra paper slips that are hard to organize, leaving you with difficulty keeping track of things.

Use business credit cards

A business credit card is a digital payment card used for your company’s expenses. Credit cards are great for businesses because they allow you to keep track of all your expenses and income in one place.

Using a business credit card is convenient because you don’t have to immediately mess with payments or bills. You can put the expenses on the credit card, and when it’s time to pay the bill, you can pay it out of your company’s bank account.

A business credit card also makes it easier to track all your expenses by using an expense management system connected to the bank account. The cards save time, boost efficiency, and provide an accurate and paperless trail of all business expenses, leading to business growth.

Integrating your bank account with your accounting software creates a seamless system that automatically records all your expenses. You can set up an automatic transfer of income or money coming into the business.

Track transactions immediately after making sales

The best time to track your transactions is after making a sale. If you don’t follow up on a trade as soon as it happens, you could easily forget to do it later, leading to a missed transaction.

To organize your company’s income and expenses, ensure all sales get recorded after they happen. Immediate tracking will ensure all income and money coming in are recorded accurately and on time, saving time later, avoiding transaction pile-ups, and ensuring proper invoice management.

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Choose between cash and accrual accounting

When choosing the accounting method for your business, you must consider your company’s needs and decide which way will work best.

Cash-based accounting is a popular method that is easy to use and understand. It allows you to record all expenses when they’re paid or incurred. You can track all money coming in and going out of the business in one place because there’s only one cash account in your company.

On the other hand, accrual-based accounting involves recording income or expenses when they are earned or incurred rather than when money goes out or into the business account.

Set up a business bank account

A business bank account is an account that you set up expressly to hold all money related to your company. You must set up a business bank account because expense management software has an option to connect to the bank accounts.

All your business’s income and expenses should flow through one easy-to-track account. If you have multiple accounts or branches, be sure they are all linked together, so there is no confusion between them.

Your business bank account will allow you to get paid out of your company’s different bank accounts, which will help keep things organized and accurate, especially when dealing with multiple clients or managing cash flow for the company.

Wrapping up

You must track your expenses with an integrated expense management system to keep accurate records and prevent mistakes. Use these tips to ensure you are doing the best job possible to track your business’s expenses.

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Remember, the more you stay organized, the easier it will be to keep track of everything.

 

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