What Are Expenses?
- You will know how much money your business is making.
- You will lower the amount you have to pay in taxes.
- You will need them organized if you are audited by the IRS.
- You will stay within your budget.
- You can grow your business by knowing how much cash flow you have.
How Often You Should Track Expenses?
- Small expenses should be tracked either daily or weekly.
- Most set expenses will be on a monthly basis.
- Estimated Quarterly Tax Payments, and often Sales Tax Payments usually are on a quarterly schedule.
- Yearly expenses are important to keep track of because it is easy to forget things that only come once a year.
Ways to Keep Track of Expenses
- Use any type of spreadsheet. ( There are a lot of free ones found on the web.)
- Use accounting software. (There are many types of both free and paid software, so choose the one that most fits for you.)
- Hire a Bookkeeper or Accountant ( If you have a small business, then a Bookkeeper can be a great choice for you. If you have a more complex business, then an Accountant may be a better choice.)
- You can keep it as simple as a notebook, however, this is not the recommended way. This is not the preferred method for and IRS audit and may end up costing you money.