Business expense tracking is a must if you are going to rock your business, but you might be like me, a free spirt who really doesn’t want to keep checking in with her bank account.
Well, according to my Papa, Lee Davis, you have to track your expenses or you may need to get out of business. Thus, join me as I learn from my father, an expert at Quickbooks and a financial wiz.
Business Expense Tracking According to Lee Davis:
Let’s find out what the financial wiz has to say about business expense tracking:
“If you don’t keep track of your business expenses, you may not be in business very long. Tracking and measuring expenses through your business will help your small business save and keep more of your hard earned income.”
Thus, it is a serious problem if you are not tracking your business expenses.
The good news is that tracking your business expenses couldn’t be easier with Quickbooks.
Lee says that, “Quickbooks is able to track, record and if necessary, charge to your customers items you purchase for their job.”
An example of tracking business expenses with QuickBooks:
Recently Lee worked with a carpenter, and here are the lessons you can learn from his experience:
1. Use a business credit card to track expenses.
He was using his personal bank account and his credit card to operate his business. The first step was to open a separate business bank account, and use a credit card that could be tracked for his business. This would save time and money in managing the expenses and income of the business.
2. Learn how to record certain transactions.
Understand the expenses related to your business, and know what is a deductible expense so that you can maximize your deductions and your profitability.
Tip: QuickBooks can help you decide what are deductible expenses based on your business chart of accounts.
Principle: Only charge purchases to equipment if the value is over $600.00.
Some small business owners will charge all purchases to equipment when in fact the only items that should be charged to equipment are those for a value greater than $600.00.
Tip: For automobiles track mileage.
A company may take gas as a deduction when they would benefit by tracking their mileage instead of automobile expenses.
It’s a better tax deduction to take the milage expense than the gas expense.
3. Use QuickBooks to charge customers.
The carpenter needed to bill his customers each week, track what he ordered through his vendors and set up the appropriate items to charge his customer.
Tip: Use Purchase Orders in QuickBooks.
QuickBooks has a great tool that can be utilized through the purchase orders.
When the contractor purchases items or pay bills for his customer, these can be charged directly to the customer. If these contractor supplies are not charged timely with a markup, this will effect the contractors cash flow and his ability to bill correctly and timely.
Tip: Use the Estimates feature in QuickBooks
If the contractor used the estimates feature in Quickbooks he could bill based on progress billing. Let Quickbooks help you make more money buy tracking, recording and invoicing your customers timely.
Other useful tips:
Use your smartphone to take a photo of the receipt
Tip: A typical expense that doesn’t get reported is meals and entertainment.
When you are dining or having fun on the job, bring your smart phone and take a picture of the receipt to report the as an expense.
Tip: If you pick up something from the store, bring your phone to take that photo.
If you pick up supplies from the store and you pay cash for something, you might forget to record the expense. This is when you would snap a picture of the receipt.
How can Lee Davis and Company help you with your business expense tracking?
Lee Davis and Company is a bookkeeping and management company. We provide our clients with the support and knowhow to increase a business’s profitability and efficiency.
We could train you. Email [email protected] if you would like to sign up for a group or individual training session.
Perhaps you would like Lee Davis to sit down with you and discuss how you could get a handle on your expenses. Lee would love to do that with you.
Perhaps you have tried to control your business expenses, but you can’t seem to do that. Lee Davis and Company would love to manage your business for you. We offer part time business management for small businesses that would like to hand off the day to day management of their business to a professional.
Blog Takeaway – The Top 9 Accounting Issues
The following handout is part of our Introduction to Bookkeeping Course, but we are giving this to you for free today for checking out this post. Read it and download it. I hope that it helps you rock accounting.
What can you expect from Lee Davis and Company?
Lee Davis is the president of Lee Davis and Company. He prides himself in helping his clients make their dreams of running a successful business a reality. He has the tools and advice that will help you, the client, get to the next level.
What services can you find at Lee Davis and Company?
- Bookkeeping Services
- Small Business Advising
- Quickbooks Training
- Management Services