How to Organize Business Expenses

Do you know where your money is being spent?

Whatever the size of your business, it is very important to track your business expenses throughout the year. Detailed business expense records can make time-consuming tasks, such as accounting and filing taxes, much less daunting. You don't need to hire a CPA or have a degree in accounting to get your financial house in order. If you own a business, take the time to learn a few simple tips and habits and start tracking your money today.

Things You'll Need

• Notebook
• Folder or large envelope

Instructions

1. Divide a notebook into 12 sections. You will need to make one section for each month of the year. The number of pages you have in each section should be determined based on how many expenses your business has.

2. Make a separate page for each type of business expense, starting in the first section. You might include pages for expenses such as utilities, equipment, advertising and vehicles. If necessary, label sub-subsections under the headings. For example, you might include gas, maintenance and repairs under the heading of vehicle expenses. Continue through each section.

3. Use this notebook to record your business expenses throughout the year. Each time you record an expense place a copy of the receipt in a folder or large envelope for your records. It is a good idea to save receipts for three years in case you need them for an audit.

Tips & Warnings

• If you use a vehicle for work, you may want to keep a small notebook in your car or truck to track mileage as you are driving.

• Take time to record expenses at the close of business each day to make expense tracking a habit.

References

• PowerHome Biz: Basic Business Good Record Keeping