How to Organize Small Business Expenses - Brink's Money
How to Organize Small Business Expenses
29 Nov 2021
If you are the owner of a small business then you are probably familiar with the struggle of staying on top of your business expenses. You have to track, record, and analyze expenses as part of your financial management efforts while also handling general business responsibilities. Financial management is an integral component to a business because when you are proactive towards expenses, you are more likely to steer clear of financial issues down the road. One of the most efficient actions you can take towards helping your business financially is to organize your small business expenses. Staying organized can be quite easy and here are a few tips to help get you started:
Separate Your Personal and Business Bank Accounts
When you start out your business, it might make sense to use one bank account for your business income and personal finances. In reality, having one bank account for all of your finances can make it a pain to keep track of expenses. Not to mention, the day you need to file taxes, one bank account will make it more difficult to account for business expenses. We recommend setting up a personal account and a business account from the moment you start doing business.
Set Up a Filing System
Depending on how you decide to keep financial documents and whether that is with a paper or digital filing system, you ultimately need to find a way to organize your documents. Here’s a list of document types that could be a helpful starting point:
Separate Business Expenses into Categories
If you take away anything from these tips, then let it be that regularly reviewing your expenses means you’ll better understand where your money is going and help you grow as a business. Small businesses face difficult obstacles on the regular, so tracking expenses will only provide you with the data you need for a more efficient expense management process and better decision-making in the long run. When reviewing your business costs, it’s important to separate them into specific categories to help you budget and make the most of tax deductions. Here are a few categories to include:
Schedule Meetings to Stay Organized
We mentioned reviewing your expenses, but what we didn’t emphasize was scheduling regular meetings to do so. It’s important to keep in mind that your income and expenses will never be constant so setting the time to review these numbers will help you stay on top of your finances. We suggest finding a day and time each week when you can solely focus on expenses so you don’t find yourself falling behind on the more administrative tasks.
Create a System for Tracking Your Expenses
After you’ve given some thought to how you might categorize your expenses, the next step is to create a system for tracking your expenses that works best for you and your business. You might find that creating a spreadsheet gives you the most control over your finances or you may prefer to manage your finances online with bookkeeping and payroll programs. If you choose to use an online service, they can help save you time and reduce any possibility for human risk. On the other end, if you want to have complete control of your own bookkeeping, creating a file for each month can help you budget and keep things organized when it's time to look at your finances at the end of the year. Bookkeeping can be tedious at times, but if you create a system from the start, you can keep your business running by updating information as you go.
How you choose to manage your business finances is one of the most important aspects of being a small business owner. Effective expense management is your key to keeping tight control of business costs and maximizing your cash flow and profit. If you want to stay on top of your operating costs, you need to know exactly how much you are spending and where it’s going. To get better insights into your finances, start by organizing your small business expenses and soon enough you’ll see the payoff of your dedication.
Looking for a solution you can trust to bring you greater control and visibility of your business expenses? Learn more about how Brink’s Business Expense can make expense management easier and faster here.
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