Tracking your business expenses can help you see where your money goes, make sure you’re not spending too much, and make the correct tax deductions when you file your tax return.
Depending on the complexity of the business and how much revenue it generates, companies can choose from a range of accounting solutions that differ in their ability to simplify and automate accounting and financial management processes.
1. Automation through software
Automated accounting software can make it much easier to run a company and manage its finances by combining different data sources, applying rules, and processing calculations.
It also provides insightful updates and personalized reporting dashboards that eliminate costly and error-prone manual accounting. Data can be extracted from receipts, invoices sent or paid, accounts compared and all that can finally be wrapped into a neatly organized report, giving you more time to run your business.
Expense reimbursement software allows you to keep track of expenses and process reimbursements without having to worry about paper receipts. Employees can use an OCR scanner to photograph receipts, and the app extracts and uploads the necessary receipt data. With compliance automated, Finance teams can process reimbursements faster, enhancing Finance productivity and employee delight.
2. Get cloud-based support
Financial technology is headed to the cloud. In fact, studies have shown that 55% of organizations currently use multiple public clouds. Cloud-based financing enables managing your finances from a distance, without the constraints of opening hours or the risk of breaking social distancing limitations.
A lot has also been done in the way of ensuring safety through encryption and zero-trust verification. An added, and possibly overlooked benefit is cutting costs of maintaining an on-premises infrastructure through removing servers, server installation, and maintenance while at the same time gaining the space a server room would have occupied.
3. Mobile banking
Another way to make sure you have access to your business finances wherever you are is to use mobile banking. You can optimize your banking experience from something as little as spending alerts to something as big as forecasting your spending.
Mobile banking is more personalized, more reactive, and is constantly being improved and updated with services and safety features, keeping pace with today’s expanding market.
4. Business credit cards
Avoid using personal checking accounts and credit cards for business expenses. Make sure you have a separate business credit card, business checking account, and business savings account.
Unless you reimburse yourself or an employee for all business expenses, the mixing of funds creates unnecessary complications and exposes your business to IRS scrutiny. With a business credit card, you can easily track business spending while building up your business credit, which you will need for financing in the future.
5. Digitalize everything
Going paperless is not only good for the environment, but it’s also good for your business, too. Keeping digital copies of not just financial, but all your documents, ensures that they will not succumb to time and deterioration, they will not be shoved in the back of a drawer somewhere and lost forever.
Keeping digital copies of documents will save you storage space, but also time as you will never again have to go digging through archives. Access to documents is also more easily controlled this way, with versioning and a historical overview of all changes made to any document.
6. Update as you grow
Once you have set up a system for organizing your spending, you can build on it with the most up-to-date information. Mobile apps and other software solutions allow you to track spending and categorize it into relevant projects and customers. If your business is growing and your spending is increasing as a result, you might want to use a more sophisticated tracking method.
When selecting a new finance organization software, look for information about other programs and applications it is integrated into, and make decisions that simplify, rather than complicate, your business.
With carefully chosen accounting software and related practices, you can easily access and review information about the revenues, profit margins, and financial health of your company. By switching to a digital process for editing and managing receipts and invoices, you can save costs, reduce the margin of error and subsequently improve the profitability of your business.