Keeping track of your company’s expenses is not only important to maximize cost-efficiency, but also for accurate tax filing. Luckily, the present offers cutting-edge tracking tools and cost management strategies that make the task effortless.
Separate Personal from Business Expenses
If you’re planning to buy a new pair of shoes for your kid, don’t use your business credit card to make the purchase. Although you can later make repayments to your business for that personal expenditure, it is not a good habit to adopt over time. Furthermore, it complicates the process of keeping an updated and accurate record since personal and business expenses get mixed up.
Separate bank and credit card accounts for different purposes. This simplifies the burdens of monthly recording and saves you countless hours of labor every month from tracking deductible expenses in different departments.
Consult a Professional
Accountants are much more adept and capable of managing cash flow than most business owners. Their in-depth knowledge of accounting as well as tax regulations will save you thousands of dollars per year, so hiring them isn’t really a huge cost concern since the benefits quickly outweigh the service fees. An experienced accountant will almost always be able to find more tax deductibles and protect you from tax penalties.
Make sure to find a good accountant whom you can trust with your business records. Remember, you’ll be working with an accountant for as long as your business is standing. Establish sound business relationship with your accountant. If you don’t feel that your personalities complement one another, then find another accountant.
Take Advantage of Technology
Web-based tools, such as QuickBooks Checks, give you the power to run your business and the complex finances that come with it with ease. Ideally, pay for custom cost management software that you can conveniently update on a daily basis. This may increase overhead expenses over the short-term, but the long-term benefits of getting a streamlined checkbook will pay for itself.
You can also download expenditure tracking applications that are either free or cost only pennies to upgrade. The apps are a fast and convenient way to track expenditures and record receipts using any computer or mobile phone. For large companies, it can also serve as a timely way of getting expense reports from your employees.
Avoid Spending with Cash
Using cash to pay for business expenses will make it more challenging to keep correct bookkeeping records and documents for later use. Physical money is difficult to track, but easy to spend. In addition, it’s hard to keep the receipts with you as it accrues in your wallet or drawer. Using debit or credit cards will make expenditure tracking simpler and even eliminates the need for physical receipts. All transactions can be made paperless if desired by the business owner.
Avoid Spontaneous Expenses
Keeping up with expenses can be even harder when you make out-of-the-blue expenses for your business. Plan and prepare for every cost you decide to take on. Having more time to think about these pivotal business decisions will allow you to decide wisely and, at the same time, give you more time to record everything either on your business journal or tracking software.
With today’s technology, it is much simpler to track expenses even in the largest of business scales. Good tracking and recording practices, however, take time to adopt and master. Get your entire workforce on board, and train employees on how to create and maintain accurate expense reports. Once you master this skill, you’ll have more free time to allocate to other important business tasks including manufacturing and sourcing investors.