Keeping Track of Expenses
It is important to track and document your business expenses not just for you to ensure reimbursement, but for the company to stay compliant with tax write-offs. Yet, employees do not want to complete this essential task as it is time-consuming. Here are four simple tricks to keeping track of your business expenses and make it easier to submit:
- Use a Binder – Have a separate space for all your receipts. Label each binder by year and organize all receipts by day. Try to have your receipts legible and clear. The more accessible your receipts are, the faster you can answer questions regarding purchases or need to check on a transaction. Fit as many receipts as possible on a page. And if you are in the habit of not asking for a receipt, start to ask for one!
- Get a Journal – On the back of your receipt, write down the reason for the expense. Then, enter the context for each transaction into a journal. This way, you can easily account for the nature of your expenses. For example, for a business dinner expense, write down with whom you had dinner and the reason.
- Create a Live Spreadsheet – If you don’t want to invest in a tool like QuickBooks or just want to keep expenses separate, use a live spreadsheet tool like Dropbox and Google Sheets. You can update your expenses as long as you have an internet connection.
- Streamline to A Software – QuickBooks has an app extension that allows you to take pictures of your receipts for a picture diary. Other apps like Evernote will accomplish the same thing. Paper receipts are important for recordkeeping. Streamlining pictures and other media to software is an excellent organizational tool but should not be your only way to keep track.
Regardless of what you do, your expenses need to be cohesive. What is shown in your spreadsheet, documented in your binder, or logged in QuickBooks should all be the same. This is important not just so you are properly reimbursed through your company, but if you are a small business owner, for tax and auditing purposes. Stay organized. Take ten minutes each day to go through your expenses for the day and make sure they are appropriately categorized.
Patrick Coughlin is a Senior Marketing Analyst at Consultants 2 Go.