How to Organize Expense Reports for Your Business

StrategyDriven Managing Your Finances Article |Expense Reports|How to Organize Expense Reports for Your BusinessDid you know that 5% of small business owners get audited each year? While the likelihood of your business getting audited by the IRS is low, it’s still important to keep your business expenses organized. Not only does that protect you on the off-chance you do get audited, but it helps you avoid paying more taxes.

Expense reports are a great way to track how much you and your employees spend. You want to have receipts and documentation to support all deductions you take at tax time.

This guide will discuss how you can track expenses and avoid tax-related headaches.

What Is an Expense Report Used For?

An expense report lists all costs related to running a company. Certain purchases are needed to run a business, such as:

  • Traveling for an event or conference
  • Entertaining and hosting clients
  • Driving your car for work
  • Meals, parking, gas, and hotel costs related to work
  • Supplies and hardware

Many of these costs are deductible when you file your business taxes. However, they need to be documented and organized.

Employees also use expense reports to get reimbursed by their employers. If an employee pays for something out of their pocket, you’ll want to verify that they paid what they’re claiming.

What’s Included in Expense Reports?

Whether you use paper or software to do your expense reports, they need to include a few things. These details include:

  • Date: The date the expense was incurred
  • Cost: The total amount for the expense, including taxes and tip
  • Description: A description of what the expense was
  • Category: What type of expense it was, such as a plane ticket or meal

You can require other details on your expense reports depending upon your needs. Noting what client the expense was for will help you stay even more organized.

Keep Your Receipts

Filling and organizing your receipts is essential to creating expense reports. Your receipts provide physical proof of the deductions your business claims on its taxes.
However, keeping around piles of receipts can take up a lot of room. You also run the risk of losing important documents.

Many programs use AI-based receipt capture to organize expenses. You can take a picture of your receipt with your smartphone. The image then gets uploaded and stored in your expense report system.

Use an Expense Report Platform

A software program is a great way to create an expense report without sifting through a ton of paperwork. For example, Bento for Business uses virtual cards so employees can track their expenses.

Employers can set daily limits for how much their employees spend. Employees can snap photos of their receipts and upload them into the system. Bento for Business then matches the transactions with the receipts, making the expense report process seamless and fast.

Save Time and Money With a Reliable Expense Report System

It’s important to stay organized with your business’s expense reports. Avoid stress around tax time and have the proof for all of your deductions with comprehensive expense reports.

Check out one of our other articles to improve your business’s practices.

How To Cut Business Overheads

StrategyDriven Managing Your Finances Article |Business Overheads|How To Cut Business OverheadsIt’s crucial that you spend money on your business. If you just set it up and hope that people will find it and start paying for your products and services, you might be lucky – this could happen – but it’s far more likely that you’ll make little to no sales and that your business simply won’t succeed. To be noticed, you need to spend money; you have to market effectively. Yet, in order to have the funds to market in the right way, you may need to cut back on other business overheads, especially at the beginning. With that in mind, here are some of the best ways to do that so that you can invest in your marketing strategy and start to build your business up.

Have A Review

The first thing you’ll need to do once you realize that you must cut back on your monthly business expenses is to have a review. Ideally, you should ask your accountant to help you since they will already be privy to the income and outgoings of your business and may already have some suggestions as to just what you can do to make things more streamlined. Assuming you have an accountant to do your booking keeping and other financial tasks, it’s time to engage them to give your books a thorough overview. They can then give you their opinion on what you can do away with entirely, what you can reduce, and what you’ll need to keep paying for.

If you don’t have an accountant, now is the time to hire one. Although it is an additional expense, your accountant will be able to ensure your business is running profitably, and they will take the financial tasks away from you, allowing you to concentrate on the marketing and other aspects of the business.

Speak To Your Employees

Although you may not think to do this initially, the fact is that your employees are crucial to your business, and they see a lot of things first-hand that you won’t see when you’re running the business. Therefore, it’s important to take this into account and speak to your employees about anything they have noticed that might be wasteful and, alternatively, anything that you’re not currently paying for that would enhance the business.

You don’t have to take their advice – this is your company, after all. However, it could be that some excellent ideas come from this consultation that you would never have considered before.

Buy In Bulk

Buying in bulk can help save money in many areas of your life, not just in business. Of course, you may need to spend more than you had intended to when you buy a lot of one product in one go, but if you can negotiate a good deal, you will be saving money overall when you consider the cost per item.

The key is to buy things that you know you will be able to sell – there is no point in getting a great deal on a product and then finding that no one wants to buy it. If you can pinpoint what your customers want and buy in bulk – saving money – and then sell at the usual price, your profits will go up and you will have reduced your outgoings at the same time.