Did your employees spend more than a week just sorting different receipts and tracking your company’s business expenses during the last tax season? That is a loss of hundreds of hours which could have potentially been used for some productive work. If you do not want such a scenario every now and then, it is time you make necessary changes to your existing system to track expenses more efficiently. Here are a few ideas that can improve the way your current system works.
Create a Business Bank Account
If you are new to business, then you might still be using your personal account for your business dealings, which should not be the case. Having a different account significantly improves the efficiency in tracking business-related purchases and expenses. Furthermore, you can also issue business credit cards to your employees for making purchases. Since the purchases are done through your business account, they can be automatically documented as proof for your income tax returns.
Keep a Tab on The Receipts
It is important to keep a record of all the receipts for your business-related purchases. Yes, you should keep the physical receipts safely but must also ensure that you have a softcopy of every single receipt. Try to make separate folders for different months to make them more accessible. All of this comes in handy during income tax audits.
Record the expenses as and when they occur
Use Google Calendar or other such software to track and record your expenses on a daily basis. You can also set reminders to report expenditure or when you have to make a certain payment. Furthermore, here you can list details like the reason behind the transaction, names of the receiver and sender, amount spent and so on. This practice will help you during the tax season as you can simply print the calendar to get information you need.
Do not miss out on small travel expenses
Most companies face major issues while tracking expenses when there is a lot of travelling involved. If you or your employee travels for a business-related thing, then make sure that you keep track of even the smallest of purchases. The restaurant bill for the dinner you had with the client or the cab you booked to reach a meeting is a company expense. However, the shirt you bought during the trip is not.
Invest in Good Expense Management Software
With so much involved in tracking the expenses of your company on a daily basis, the best thing you can do is to integrate an expense management software within your existing system. The idea behind this is to automate most of the things so that you do not have to invest a lot of man-hours in tracking all the crucial data. Opt for a system that allowsevery employee to have their own account to upload thepictures of the receipts and mention the remaining details on the go. This way, your virtual ledger is regularly updated with all the information on one platform. Using a software with cloud memory will further help your cause as you won’t really have to worry about storage memory.
If you are looking for absolute efficiency while tracking your company’s expenses, then get in touch with a company that provides an excellent employee expense management software.