The process of tracking your company’s expenses can be a monotonous task, yet it is vital to your business’ success! You might be wondering how you can turn this mundane task into something a little exciting, or perhaps even avoid it. However, by tracking your expenses on time and not delaying them to a later date, you’ll save yourself from more pain in the future.
We strongly encourage you to work with a pre-accounting app like Receipt-Bank. To compile your expenses and expense reports in one place – it’s as easy as snapping a picture, forwarding an email, or uploading a source document. Get in touch with us to learn more. Now, here are four ways tracking expenses can benefit you:
#1 – It determines business profitability
You can calculate your business’ profitability by taking out the sum in expenses from the revenue. This calculation can help you determine whether or not your company is making money. At the same time, the more profitable your business, the more investors are attracted to your company, supplying you with more funds for growth. Unfortunately, the reality is that if you haven’t kept track of your business expenses, you’re likely going to have a hard time trying to calculate your business’ profitability. That said, by making sure that you’re maintaining an accurate record of all your expenses monthly, you can make a more accurate guess of your business’s profitability. By doing so, you no longer have to incorrectly assume that your business is more profitable than it is.
#2 – It helps you become more prepared
No one wants to face end-of-season tax, especially if they aren’t prepared. Hunting down invoices and receipts might be what you’re doing right now, but it doesn’t have to stay this way. By making sure that you have everything accounted for, not only will you reduce the stress that tax season brings, but you might even find ways to get your money back! It can include travel expenses, office expenses that are spent on supplies, and rent costs. If you have home offices, for example, you can claim back utility payments from them. However, this is only possible if you maintain an accurate record of the expenses.
#3 – It improves your money management
One of the most significant reasons that a business fails is because there isn’t enough money going around to keep the company afloat. To avoid such a situation happening to your company, track your business expenses monthly! Keep track of how much you’re spending, what you’re spending on, and whether costs are higher than income to help you understand the current situation of your business. In other words, you become more financially aware of the money you have at hand. With that knowledge, you can begin creating strategies that will help you save money and possibly even free up cash for other business activities.
#4 – It boosts employee morale
Your employees are going to spend money on food, traveling, and other expenses. By keeping track of all these receipts and bills and promptly reimbursing them, you’ll enjoy a much happier workforce. Remember, the happier your employees, the more they will be productive.
With the reasons stated above, you now know the importance of tracking your business’ expenses. Remember that the annoyances of expense tracking are only short-term. In the long run, you can make sure that your company is on the right path to success.
We understand running a small business is complicated. Your financials shouldn’t be. Take the guesswork out of the accounting and let us help you build your blueprint for success.
Contact us today for your free assessment to find out how Blueprint Accounting can support your business.