When business owners are first starting out, their focus is usually on their products and services. What happens after all of that is figured out, though? Where should the money go once it’s collected? Are there tax forms to be filled out? Should you keep a shoebox of receipts? Learning how to track expenses as a small business is one of the most valuable lessons you’ll learn. Keep reading to learn more about expense tracking as a small business!
Open a separate bank account
Once you have an established stream of income, it’s very important that you open a fresh bank account for your business. If your business is legally registered as a business through your state’s corporate commission, you are actually required to have a separate bank account. You will be able to open a business account once you receive your EIN number.
Even if you are not an LLC, partnership, or corporation, you should still open a separate bank account. This is because it is much easier to keep personal and business finances separate. Commingling your funds makes it difficult to see where your cash flow really is, and can even put you in legal trouble. You can read more about this in this blog post.
Start tracking your expenses with an app or software
Starting to track expenses as a small business is one of the most important things you can do. Without it, you could miss out on important deadlines, possible deductions, and in general feel “lost” in your finances.
Quickbooks Online is the software that we use with our clients to track expenses, send invoices, and monitor cash flow. It is a well-rounded software with so many possibilities. It has features that allow you to scan receipts, create reports (balance sheets, P&L, etc) so that your life is easier come tax time.
When you hire MOD Ventures as your outsourced accountant, your services include Quickbooks Online and a professional who knows how to use it.
Why hiring a professional is better in the long-run
While you might not be able to hire a professional accountant at the beginning, we highly suggest keeping it on your radar as you grow. When you hire an outsourced accountant, that the work will be done correctly in the long run. Oftentimes when people take on DIY accounting ends up with more problems than successes. This can be costly in the end when you have to have it fixed by a professional. For these reasons and more, we believe hiring a professional outsourced accountant is your best move.
If you have questions about tracking expenses or want to hear more about our services, please contact us. We’d be happy to get you started and on the right track!