What are the Best Tips for Tracking Business Expenses?

There are numerous ways to simplify the tasks of tracking business expenses. To begin with, individuals should always keep receipts for business expenditures. It can also be very helpful to develop consistent spending habits and to pay for all business expenses by one method from a single account. Business owners should make sure they have the necessary accounting staff or accounting services to cover their needs and that all staff adhere to policies of prompt and efficient expense reporting.

Individuals who make business expenditures should develop a habit of always asking for a receipt. This even includes occasions when the purchases may seem petty or insignificant. It is important to remember that large numbers of small purchases over the course of a year can amount to a significant amount of money. Even if individuals can remember what they spent or they tend to write it down, in many places the law still requires that a receipt be kept for a number of years.

Developing consistent spending habits is a good means of tracking business expenses as well. This way, in the event that a receipt is lost or destroyed, it will be easy to determine the expenses that it contained. For example, a sales manager may purchase coffee every morning for the staff sales meeting. It will be beneficial for accounting purposes if he makes that purchase from the same café. The same principle applies when purchasing supplies or obtaining services.

Using a single means to pay for all costs can also be a great way of tracking business expenses. In many cases, using multiple accounts or cash can make the task complicated and tedious. Instead of handling it in that manner, it is likely to be much simpler if a single credit card, debit card or checkbook is used for all or most transactions. There should also be an account that is restricted to business purposes only. This way, a statement will be available for any funds spent.

Larger businesses also should employ a sufficient accounting staff or obtain the necessary services for tracking business expenses. Attempts to save money by making careless cuts to accounting expenses may be very costly. There are normally two good reasons why expenses need to be efficiently and promptly tracked. The first reason is because doing so provides a more accurate view of the business’ available assets. The second reason is that it can decrease the chances of facing consequences imposed by tax authorities.

Staff members who have to provide accounting staff with expense information should be required to do so at specific intervals. For example, a person may be required to submit a revised business statement daily while he is on a business trip. Then, he may only be given two workdays after returning from the trip to turn in copies of his receipts. If it is found that staff members tend to disregard these policies, it may be necessary to make failure to adhere a disciplinary issue.