Not only is it messy and a major headache, it also makes it more likely that you’ll procrastinate the next step: categorizing your expenses. At the end of the day, you never want to have to spend your time separating business and personal expenses from the same receipt. The same goes for credit cards-keep one just for business purchases. In this scenario, keep a separate card for your business expenses. If you’re a sole proprietor and don’t need to send or receive checks in the name of your business, you can use a separate personal bank account as your business account. For example, if your business is incorporated, or if you need to write or receive checks in your business name, you’ll need a what’s called a “business bank account.” This is a type of account that your bank explicitly offers. This can look different for different businesses. Which brings us to this first step: having a separate business bank account. Tracking and categorizing your business expenses is a lot easier when it’s not mixed with your personal expenses. Keep scrolling to learn how to track business expenses. To get to that point, you’ve got to start somewhere-and as you’ll soon find out, that’s at the bank. It helps you look at the big picture so you can make more educated financial decisions for your business. Tracking business expenses isn’t just a way to keep you organized. How to track business expenses in 4 easy steps Starting to see the importance of tracking? We thought that might be the case. Then you’ve got your meetings at the local steak restaurant to woo over clients-another expense. The wages paid to the part-time production coordinator who works 5 hours a week for said freelance designer would also be a business expense. For example, for a freelance designer, a laptop would be considered an expense, as would programs like Photoshop or Illustrator. They’re considered to be any outflow of funds that are used to cover the cost of goods and services that your business uses. What are business expenses?īusiness expenses are funds paid by your business for your business. Sounds simple, right? Read on to see how easy expense tracking can really be. Make it a habit: Review and categorize your business expenses regularly.Go automatic: Connect your bank account to your accounting software to automatically import transactions.Keep things separate: Have a dedicated business bank account and card.Don’t do it alone: Use software to categorize and keep your expenses all in one place.Store your receipts: To make this easy, digitize all your receipts with a receipt scanner.Need a bit of TLDR on the topic of tracking business expenses before you dive into the details? We’ve got you (and your expenses) covered. Review and categorize your business expenses regularly .To get you started on the pathway to financial discovery, we’ll use this article to review how to keep track of business expenses in just four easy steps: The good news? Finding out the answer is pretty easy. It’s also one that you need to ask yourself as a business owner-especially when it comes to finances. “How are you really doing?” isn’t just a question we (try to) answer in therapy.
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