How to Best Manage Your Business Expense Records

Business | July 21, 2017, Friday // 16:56
Bulgaria: How to Best Manage Your Business Expense Records pixabay.com

Unless you have a love for numbers, managing your expense records is one of the least enjoyable things about running a business. With that said, it is a necessary evil that should be done – and also one of the most important due to its link to filing taxes.

That is because if you leave your figures all disorganized this will cause a major headache when it comes to the aforementioned tax season. As a result, keeping on top of your expenses should be a high priority for your company. 

If you are wondering how to best achieve just that, read on for some top tips to contemplate when managing your business expense records. 

Don’t make your business personal

By that, it means keeping your personal expenses separate from your business expenses.

It might seem both simple and obvious, but it is actually easy to get these mixed up from time to time. For example, if you treat a potential client to tickets for a baseball game, does this count as a business or personal expense? Well, it’s complicated – if they went alone and you weren’t in attendance with them, these can’t be written off as you are technically not conducting business. Consequently, it is important to always check what is and isn’t an applicable tax deduction.

With this in mind, it is also recommended that you have both a bank account and credit card that is separate for your business. Ultimately, this will ensure tracking your finances is made much more straightforward overall.

Keep each yearly record in one place

Receipts, manual business checks, monthly utility bills – whatever the expense, make sure that you keep them all in one place. Arguably the best way to do this is by organizing your business records on a tax year-by-year basis. Doing this will not only easily help to find particular business records when needed, but a filing system like this will no doubt assist in streamlining the process of filing your taxes. It is recommended that you keep these records for a minimum of six years.

Using specialist accounting software is the best way to track those financial figures. These are typically inexpensive to use, while they provide functionality and ease of use into one enticing package.

Measure your mileage

Mileage is one of those business expenses that can easily be overlooked when finishing up your yearly records. Yet if you use a mode of transport for business-related purposes, it is actually really easy to keep a mileage log.

In fact, all you have to do is make a note of your mileage/kilometer reading at the start of the year. Then it is a case of checking it at the end of the year, and using the difference to work out your mileage in an accurate – and super simple – way.

Of course if you have more than one vehicle for your business, make a log for each one.

 

 

 

 

 

 

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