Six Ways To Keep Track Of Your Expenses
By now you may have heard someone in accounting passionately tell you to “always keep track of your expenses!” to which you may have at one point said internally, “how hard could that really be?” Flash forward to tax season and you suddenly remember all those business lunches you went on and coffee breaks during work…you know, the ones where you forgot to ask for a receipt. Sound familiar? You’re not alone!
We totally get it — keeping track of your expenses to prepare for tax time can be an easy thing to overlook! However, it is so important to manage your expenses to bring down your tax amount owing and to have receipts so that you don’t get audited. As professional bookkeepers, we’ve come up with several foolproof ways to keep track of your expenses and for today’s blog, we’ve decided to share them with you all!
Use a Business Credit Card
One of the best ways to keep your business expenses separate from your personal expenses is to have your own business credit card. This way, by the time tax season comes around, you won’t have to sift through all of your statements to pick out what was a business expense and what was a personal one. Not to be biased but, your bookkeeper will thank you!
Get A Designated Folder
We recommend getting a bright, hard-to-miss envelope or folder to keep at your desk where you can store your paper receipts. That way, every time you sit down at your desk you will be reminded to put your latest receipts in the folder. Tangible receipts are super important when it comes to tax time, so daily reminders are super beneficial!
Set An Alarm To Review Once A Month
At the end of every month, maybe on the 28th or so, we suggest setting a recurring alarm on your phone to remind you to organize your receipts. Giving your business expenses even just an hour of your time once a month to ensure everything is all squared up will significantly reduce your stress during tax season.
Make Notes On The Back Of Receipts
Whenever you make a business purchase, make a little note on the back of the tangible receipt about what the purchase was for. For example, you could write “phone charger” on the back of a receipt from Staples so that you don’t get it confused with any other purchases made at the same location.
Apps
There are many great apps out there to help you stay on track. Many of them have a free version. We recommend apps like QuickBooks and wave you can simply snap a pic of your receipt, add any notes for your bookkeeper and either recycle the receipt or file it. Then voila, it is in your accounting software, receipt permanently stored and categorized.
Cloud Based Accounting Software
We work exclusively with cloud-based accounting software. They increase efficiency, keep your books in real-time, and you on track to make the best decisions for your business.
We hope that these six tips will help you keep your expenses organized so that your tax season can be a true breeze. Trust us, after the first few months, you will be an absolute pro at keeping track. We believe in you! Looking for more support when it comes to preparing for tax time? We’re here to help! Feel free to reach out to our team of Vancouver Island bookkeepers to inquire about our business bookkeeping services and we will professionally handle all of those well-organized receipts for you.