Tracking Business Expenses

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@ April 24, 2021: Coming Soon:

Useful Tools for Tracking Business Expenses

@Feb 26, 2021

Expense tracking is an important part of creating a budget for your small business. Keeping a record (daily, weekly or monthly) of your expenses by tracking receipts, invoices, and other outgoing expenses improves the financial health of your budget. Tracking expenses can help you stay on top of your cash flow and prepare you for tax season.

Few Reasons Why You Should Track

1. A lack of cash flow can cause your business to fail.

• As a business owner, staying on top of your monthly budget is crucial to your success.
• There is no better way to manage your budget and know where your money is going than expense tracking.
• Recording your expenses daily can ensure that you are financially aware all year long and not just during tax season.
• Knowing where your money is going and how much you’re spending can improve your spending habits.
• Plus, you’ll have a better idea of where you can allocate money to positively impact your bottom line.

2. EXPENSE TRACKING PREPARES YOU FOR TAX SEASON

• Tax season is a stressful time for everyone, especially business owners.
• Keeping a daily record of your expenses will help you avoid digging through shoeboxes, your car and pockets for receipts.
• Knowing what expenses are tax deductible can make sure you’re not losing out on any money.
• Deductible expenses include but not limited to:
  • Advertising and promotion
  • Business meals
  • Business insurance
  • Business interest and bank fees
  • Business use of your car
  • Contract Labour
  • Depreciation
  • Education
  • Home office
  • Interest
  • Legal and professional fees
  • Moving expenses
  • Rent expense
  • Salaries and benefits
  • Telephone and internet expenses
  • Travel expenses
  • Bonus: Personal expenses
  • Travel expenses to attend client meetings
  • Office supplies
  • Bank fees and interest
  • Education
  • Home office expenses
  • And lot more..

    3.  EXPENSE TRACKING MAKES BUSINESS FORECASTING EASIER

• When you track your expenses, it is much easier to calculate the profitability of your business. The equation is simple: revenue (Income) minus expenses.
• You can offer potential investors a better idea of your company’s profitability by offering them a better idea of how your business is doing. You don’t have to make an educated guess about your finances when you’re tracking your expenses. With up-to-date expense tracking, you can offer stakeholders a clear picture of your business forecast and strategy.

Credit: freshbooks

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