How should you manage your books? Here are some options: DIY bookkeeping Accounting involves similar tasks but has more to do with analyzing business finances and strategic planning than handling expense reports. It’s important to recognize that bookkeeping and accounting are different. On a regular basis, you want to be able to answer: What is your cash position? Simply put, bookkeeping is the process of recording and organizing your financial transactions-making sure records are accurate and up to date. As you’re learning how to track business expenses, you’ll see why receipt tracking is so important. You’ll want to save receipts for at least three years-that’s the typical look-back period for an IRS audit-and you don’t have to save receipts for business expenses under $75. If you have a POS system that sends customers e-receipts, you should already have digital versions.With Expensify, for example, you simply take a picture of the receipt or type in transaction details. Scan paper receipts and keep them on your computer or upload them to a cloud-based system like Google Drive.While you can keep physical copies of your receipts as a backup, you’ll get more protection and less hassle if you use digital receipts. You might not have a shoebox of receipts, as the cliché goes, but are you organizing your receipts the best way possible? Accurate bookkeeping, accounting and tax filing depend on it. You’ll build credit on a regular basis and access rewards programs created with businesses in mind. If you don’t already have one, consider getting a business credit card too. Organizing documents (e.g., Articles of Incorporation or Articles of Organization).To open a business bank account, you’ll likely need the following: Monthly fees, transaction fees and convenience will vary, and some banks even offer signup bonuses and other helpful financial services. Start by comparing business account options. If your business is a limited liability company (LLC) or a corporation, you’re required to open a business bank account. For one thing, you’re less likely to do your taxes incorrectly or overspend. the most common type of business organization-you aren’t required to keep business expenses in a separate bank account, but it makes expense tracking much easier. If your business is one of the 23 million sole proprietorships in the U.S. It’s highly recommended (and in some cases legally required) to keep your business finances separate from your personal finances. Don’t worry-this article walks you through 9 things you should do to track your business expenses successfully. You’ll avoid fines from the IRS, predict cash shortfalls, and what’s more exciting, understand when to grow, spend or save.Įxpense tracking is a little more complicated than hanging onto receipts. But you have to dedicate the necessary time to expense tracking if you want to steer clear of costly pitfalls. It’s true: There aren’t many small business owners who want to spend more time dealing with business finances.
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