How to Digitally Track Your Business Expenses

Tracking expenses is essential for business. It lets you know how your business is doing with indicators in terms of revenues, expenses, profits, debts, and more. It also makes your tax preparation much easier, especially when you are audited by the IRS or state tax authorities. However, workdays can get pretty jam-packed, so it can be difficult to find the time to do this essential operation. However, in today’s app-driven market, there are various easy solutions to help you track your business expenses digitally that will enable you to save time and draw accurate conclusions.

Here are some ways you can track your business expenses, which you can implement today.

1. Open an Online Business Bank Account

If you want to make your tracking task simple, it’s best to keep your personal finances separate from your business ones. Once they are in a different account, you’ll find it’s much easier to monitor your different sources of income. Most business accounts now have an online banking option, on which you can track and sort your transactions into unique spending categories. Instead of visiting the bank, you can sit in the comfort of your office and track all of your payments and incomings online. 

This also provides you with easy to download statements in case you need to process your taxes or present your financial information for legal reasons. Every bank has different rules and rewards for business bank accounts, so it’s wise to look at several banks before making a decision on which account to go with. To open a business account, you’ll need to prepare some documents, including your business’s name, business license, employer identification number, article of incorporation, and the relevant fees

2. Digitize Receipts with a Receipt App or Expense Tracker 

For freelancers or independent contractors, holding onto and sorting receipts can be tedious work. However, losing one receipt can really cause a lot of problems for your business, so it is an operation that definitely needs doing. Fortunately, it’s not necessary for today’s business owners to do this manually, as digital apps have been developed to help small business owners manage their expenses. A lot of self-employed people and small businesses are now using an independent contractor app to simplify their finances by integrating various tools to track expenses, hours, receipts, and other metrics. These apps are very flexible in terms of pricing, varying from free online and mobile options to more expensive desktop platforms. 

You can access your transactions directly through the app or by text message, even if you are offline. Some apps offer further functions that are useful for medium companies as well as independent contractors, such as live bank connections, invoicing, and payment processing.

3. Add Financial Tools to Your Accounting Software

Today, there is a huge range of accounting software that business owners of all IT skill levels can use to manage their businesses. It’s likely that you are already using accounting software to avoid common bookkeeping mistakes. But did you know it’s possible for you to integrate your financial tools into your accounting software too? By connecting them, you can create a seamless financial network containing your business bank account, corporate credit card, receipt app, and tax document exportation. 

This integration also helps you create financial and essential statements at a moment’s notice so that your business can flow better. When you have everything in one place, defining your business expense categories is a wise choice, and by doing so, you can review them regularly. It also makes it much easier to write off your business expenses at tax time and identify any underperforming departments. 

4. Use a Business Credit Card or Corporate Credit Card

Apart from a business bank account, you should also consider getting a business or corporate credit card. The idea is that the simpler your financial set up is, the easier it will be to manage. The best way to simplify your financial management process is to house all your transactions under one account. You can also issue a sub credit card for trusted staff members if they regularly need to make purchases on behalf of the business. A credit card also helps build up your business credit, which is crucial if you plan to finance your business with a loan. 

When you start your own business, it helps to use all the tools you can get to ensure that your business runs smoothly. Whilst business bookkeeping and taxes may sound overwhelming, using the right methods and technology can make it a lot easier. When it comes to selecting the right technology for your business, pay attention to the kinds of features you need and their integration capabilities. Follow this easy guide and simplify your expense tracking today.