Managing your business expenses is very important for every business. You should have up-to-date information about where and how your income or profits are being used. From start-ups to established businesses all have to manage their expenses or the business will doom. Hence, for the sustainability of the businesses, in the long run, each one should track and manage their business expenses.
See also: How To Write A One Page Business Plan?
Let’s see how you should go track their business expenses.
Make a business account
The first step is to segregate your personal and business expenses. Creating a business account will help you do that. Use your business card for all the business-related expenses. This will be helpful for you to monitor expenses. A business account is mandatory when there are audit or tax payments. All the checks of your expenses can be done in one single account.
Track all your expenses
You should know where your money is being spent. Nonetheless, you should be aware of the expenses are helping you build your business. It is easy to cut down on unnecessary expenses if they are helping your business. Each penny should be tracked doesn’t matter if you or your employee spends it. You should know.
Monitor everyday expenses
Successful entrepreneurs advise that every startup should know their everyday expenses. However, you should spare 10 minutes at the end of the day and monitor all the expenses of the day. You can understand the important and casual expenses made in the entire day.
Keep your bills and receipts
Why is it so important to keep your bills and receipts? The reason being that you have to show the receipts to the CA during the yearly audit. Primarily, it also proves beneficial if you forget where your certain sum of money was spent. You can go back and check all your receipts to understand the loophole.
Hire a bookkeeper
Developing a bookkeeping system is essential for every business. But if your growing business cannot afford to hire a full-time bookkeeper you can outsource the service. This is mandatory for businesses to sustain in the long run.
All the illogical expenses should be cut down at the early stage. The bookkeeper will provide you with the details of your expenses and also tell you where you can cut down the expenses.
Online Transactions and Cash
Sometimes you fail to keep track of both cash and the online or bank transactions. It is extremely important to keep a track on both. Keeping a track on cash is the bigger challenge. You fail to track the change money received at stores. Spend more than necessary because cash is handy.
People tend to forget about all the small expenses they did by paying cash. Cutting on the small expenses and gaining on huge profits should be your goal. Hence, keeping a track on both media is important for any kind of business.
Plan your income
You will spend smartly if you already have a plan. For instance, if you know you are about to receive an amount of fifty thousand in the next week, you should decide beforehand how much will you save, how much and where will you invest and how much will be used for expenditure. Planning is the precaution necessary for all types of businesses.
Pay your employees on time
When you save your income or profit you can pay your employees on time. All the employees work hard every day to meet the goals of the business, if they are not paid on time the brand value and image will be hampered.
If you keep the employees happy they will work more efficiently for the company. All the business should understand this.
Don’t pile your monthly payments
You should know when you have to pay the electricity bill, operational fees, office supplies, water bill, income tax payment, etc. Delaying any of these will become a long term hazard for the company.
Piling up these payments is a very wrong practice. Furthermore, the company will suffer for the foreseen legal actions.
Know your day-to-day and occasional expenses
If you are using your vehicle to travel for business-related work then the fuel or the cab expenses should be monitored.
Flights and Hotel rooms
If you have an onsite business visit all the expenses like flights, hotel rooms, food, etc should be written and further monitored.
When you organize lunch or parties for employees all the expenses should be tracked and noted down. Nevertheless, this is also a business expense.
Make notes about all the gifts presented to your employees and clients during festivals or events. All the expenses are important to the company.
Meetings or Conferences
All the bottles and eateries given to clients during meetings at your office should also be monitored.
Building a good tracking method is extremely important.
Undoubtedly, regular checks on your financial status are off utmost importance. All the team members should discuss the pros and cons of each expense.
Brainstorming about how to reduce some expenses and boost the business is important. This helps the regular check on business with new ideas and new methods.
Great you have reached the end of the article. I hope this helped you get all the information about the topic. Hope this helps your business. All the best!