Set Yourself Up for Success: Tracking Business Expenses

by | May 11, 2020 | Accounting, Internal Revenue Service | 0 comments

I’d be willing to bet that most small business owners don’t wake everyday excited and ready to conquer their books.  Perhaps, if you’re like most entrepreneurs, balancing your business accounts is often ignored and becomes a sensitive subject, a stressor.  And yet, tracking business expenses is an imperative part of any well-run organization. It’s crucial to have a firm understanding of cash flow, potential tax deductions and overall performance within your company. In this post, we will review five strategies that will simplify and empower the daunting task of business expenses. Come tax time, you’ll be so relaxed knowing your receipts are organized and your monthly expenses are in good shape.

Open Business Financial Accounts: Open financial accounts that are specific to your business so that related expenses are crystal clear. Then put all of your business income directly into a business account. Most popular business account registrations are:

  • Business checking account
  • Business interest bearing savings account
  • Credit card(s)
  • Money market account

Manage Receipts Properly: When you get receipts for business-related purchases try organizing them in a file by month and year. It’s helpful to write on your receipt(s) what the purpose of the purchase or expense was for, whether it be office supplies, fees, rent or gas. Additionally, businesses can claim mileage as a deduction on their taxes, so make sure to track your mileage if you use a vehicle for business purposes by maintaining a company calendar. Your calendar will effectively state where you went and when, making mileage and date of mileage very clear.

Remember, the IRS requires small business owners to keep their paper receipts, as well as any other supporting documentation, like bank statements.

Record Expenses Throughout The Day: Become financially aware and improve your money management skills by recording your business expenses daily. You will quickly learn how profitable your company is by examining revenue and spending. Just think, each time you include a business expense in your records, you’re putting money back into your own pocket come tax season.

Accounting Software: Search for affordable accounting software that allows you to manage your business income and expenses in one place. Your software should provide organization for business receipts, feeds for business bank accounts and credit cards, along with the ability to generate invoices and reconcile accounts.

Hire a CPA: How do you know when to hire a CPA? Is your company growing rapidly and you need help tracking all your expenses? Or is bookkeeping taking you away from more important tasks? Accountants can spend a few hours each month or quarter going through your income and expenses, while tracking them in their accounting software. An accountant may even help you save money annually, because you’ll be able to make small business deductions by keeping proper records, in effect negating the fees for services. Not to mention the additional revenue dollars you’ll bring in putting your valuable time to good use and allowing the experts save you time and money.

Tracking business expenses can be a ton of work, but it is a must for businesses, no matter the size, to thrive. Please feel free to contact us at (248) 934-0550 if you would like to learn more about the services we offer for entrepreneurs, small businesses and corporations.  We are here and we are honored to help.

Disclaimer

 

Always remember, Senter, CPA is here for you if you need any assistance.

Don't hesitate to give us a call at 248-934-0550, or contact us below.

Planning Ahead: Small Steps That Can Save Big Later

Even in the middle of tax season, it’s not too late to make moves that can save your business money and headaches down the line. Many business owners get caught up in the day-to-day and wait until the very end to think about taxes. The truth is, a few small steps now can make a big difference later.

Keep Your Receipts Nearby and Organized

Business owners understand that receipts are everywhere and also can seemingly end up nowhere to be found.

Are Unused Subscriptions Costing You Money?

As household expenses continue to rise, identifying unnecessary recurring charges is a practical way to improve cash flow without making significant lifestyle changes. Many consumers unknowingly pay for subscriptions they no longer use, forgot to cancel after a free trial, or no longer find valuable. While individual charges may seem insignificant, the combined annual cost can amount to hundreds of dollars.

Your Year-End Tax Bill Shouldn’t Be a Surprise

December has a way of making tax planning feel urgent—but by December, you’re already behind the strategy and some of the best planning opportunities could have already passed you.

Fall Accounting

It’s like spring cleaning, but now we’re working on it in between Back to School and Football and Pumpkins and Mostly Great Weather!

Trump Accounts: What Parents—Especially Michigan Families—Need to Know

Trump Accounts are a new type of savings vehicle designed to help families build long-term financial resources for children. Structured as a special type of traditional IRA, these accounts have specific rules governing eligibility, contributions, investments, and withdrawals.

Senter Forward: The Kind of Client Relationship We Want to Build

I will start with something that may sound strange coming from a CPA firm: we are not trying to take every piece of work that walks through the door.
We have reached a point where the question is less “Can we prepare this return?” and more “Can we build a relationship here where our team can actually help?” That difference matters.

Federal Updates on Tip And Overtime Tax Deductions

Recent federal tax legislation introduced new deductions related to qualified tip income and overtime pay. These changes may benefit eligible employees while also creating additional reporting responsibilities for employers. At Senter CPA, we are helping both businesses and individual taxpayers understand how these rules apply and how to stay compliant.

1099 Filing Requirements Update! Yes, this is good news!

The reporting amount threshold has increased. Yes, you read that right! The old $600 filing requirement for 1099-MISC & 1099-NECs has been increased to $2,000, with some minor exceptions.

To jog your memory, if you need it, you are required to file 1099s to those who you pay for rent, contract labor (not through your payroll), interest, etc. The 1099-MISC is most commonly used to report rent, while the 1099-NEC is mostly used to report non-employee compensation to most everyone.

Mid-Year Financial Checkup Checklist: Are You on Track for 2026?

Summer is a good time to check in on your finances. The year is already halfway over, which makes it easier to see what’s working and what might need attention. Maybe your income has changed. Maybe you’ve spent more than expected or fallen behind on a savings goal.