If you’re spending more time trying to track all your small business expenses instead of making money, it’s high time that you overhaul your expense management efforts. Depending on your current setup, you might need to completely introduce new expense management tasks of just do some tweaks here and there. Below are a couple of ideas to help you out.
Make Sure You Have a Separate Bank Account for your Business
Use this account solely for business-related finances. You could still move cash from your business bank account to your personal account whenever necessary for easier expense tracking. Having a business bank account would likewise help build your business credit, which is something that you should consider, especially if you’re looking to get more funding later on, adds a cash management expert in Bloomington.
Take Advantage of Online Calendars for Noting Expenses
You could use online calendar tools for setting up notifications for one-time and recurring expenses. Make sure to note the specific type of expense, for example, contractor fees, rent, or other utilities, and who received the payment. You could likewise use alerts to notify you of upcoming expenses before their due date. As a bonus, plenty of online calendar tools could be synced with portable devices such as your mobile phone or tablet so you won’t need to switch devices.
Make Certain to Manage your Receipts
Every time you get a receipt for an expense related to your business, note its existence in a record book along with pertinent details and then store it in a shoebox or envelope, file it accordion-style. If you need to look at a specific receipt, you’ll know exactly where it is. This is also helpful in case you or your business gets audited.
Take Advantage of Accounting Software
The easiest way to monitor and analyze your business expenses is to use accounting software. Most, if not all accounting software offer features for creating expense categories and linking these on tax forms. This will significantly reduce the time you spend on tax prep. Accounting software could also be utilized for generating profit-loss statements, making it easier for you to monitor and evaluate your business’ financial health.
Call in the Big Guns
If you’re looking to expand or just need more accurate monitoring of your expenses and overall financials, the best thing you could do is to hire a bookkeeper or accountant, or at the very least, take advantage of your bank’s cash management services.
While doing your financials could feel overwhelming at times, the tips mentioned above could help you get a better handle on your business expenses and over financial health.