If you’re running a small business, it’s likely that you have a lot of different kinds of expenses that you need to keep track of. From travel expenses to trainings and seminars to a company vehicle and mileage, keeping track of your startup expenses is necessary for:
- Tax purposes
- Identifying strategies for reducing your burn rate (in other words, pinpointing where you can make cuts to save money)
- Making operational adjustments in response to market or economic changes
All of your expenses should be properly accounted for to prevent future potential financial problems. And by “properly accounted for,” I don’t mean that you should have a massive receipt pile that you only excavate come tax time. What you need is a simple, inexpensive, and painless way to closely track your company expenses and to create and monitor expense reports. In the tracking expenses department, online options are the clear winner.
For startups, I highly suggest using Expensify. I love it because it is simple to use and integrates with QuickBooks (online, desktop, and hosted versions) fairly easily. If you have ever used a spreadsheet for tracking expenses, this is even easier. Also, it’s fairly inexpensive.
Whichever online expense tool you choose, make sure that it offers these essential features to help you to streamline your expenses for a lean startup (and make your tax accountant’s job a whole lot easier!):
Contact Early Growth Financial Services for accounting support and more.
Take pictures of your receipts – You should be able to snap a picture of your receipts and save them as expense entries. This is key. These photo records are invaluable for capturing your receipts in real-time, before they become paper-fluff in your wallet. And once the receipts have been captured, you’re just steps away from recording them and creating reports. Plus there’s no need to create a contingency plan for lost documentation, if all receipts are captured and electronically stored.
Import credit/debit cards and banking information – Never forget to log another expense. With expenses automatically imported, the necessity for manual entry is eliminated saving you time and mental energy.
Auto-create expense reports – Attach receipts and add and edit expenses with ease. The ability to enter expenses without attaching them to a report is valuable for staying on top of expense entry. Once your expenses are entered, you can automatically create your expense reports.
Expense mileage tracking – You can enter in date and distance of a trip or even just click on a map and your mileage will be automatically calculated.
Expense tracking – Track your expenses and see spending breakdowns by employee, expense type, or another custom filter. Monitoring the details of the expense activity of your company can help you to keep costs down and spending under control.
Ultimately tracking your expenses is a valuable exercise for the health of your company—not just torture. Once you find the right system that works for you, you can spend less time burdened with the manual task of entering expenses and more time monitoring these expenses, and using this information to better manage your business.
How do you keep track of your startup expenses? Tell us about it in comments below or contact Early Growth Financial Services for help tracking and monitoring your expenses?
David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial and accounting services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.