6 Tips for Organizing Your Expenses

6 Tips for Keeping Your Expenses Organized

It’s important to keep track of your expenses so you know exactly how much your company is spending (and on what). By organizing your invoices, bills, and receipts by type, department, and age, you’ll be able to make better purchasing decisions and be better prepared for tax season.

Keep Every Invoice and Bill

Don’t throw away your invoices, bills, or credit card statements. When you get one, note the amount and date due on your calendar, then file it away. If there’s ever a question about what the invoice or bill was for, you’ll be able to easily find it and review it.

Organize by Due Date

When you first get invoices or bills, file them in chronological order by due date. This will ensure that you’re paying your bills on time because you can just check the due date on the next bill, instead of having to go through every single one.

Create a Spreadsheet or Use Software

Keeping track of your expenses is just as important as keeping the documentation. You can easily create a spreadsheet or use an online program to track each expense. You’ll be able to see how much your business is spending each month to make sure you’re staying within your budget.

Keep Every Receipt

You should also keep a copy of every receipt. The IRS only requires you to keep receipts if the expense was $75 or more, but it’s better to be safe than sorry. Keeping your receipts will help you make your case if the IRS ever audits your company.

Make Notes on Your Receipts

Before you file your receipts away, make a note on them that states the business purpose. You’ll probably remember why you bought ink or a printer, but it’s harder to remember why you’re considering dinner a business expense. In the case of dinner, write down who was at dinner with you and what business was discussed during dinner.

Scan Your Receipts

After you’ve made a note on your receipt, scan it and save it on your computer. The IRS expects you to keep expense documentation for 6 years, and the ink on your receipts will probably fade a lot in that time frame. Thankfully, the IRS accepts electronic copies. It’s a good idea to still keep a paper copy of each as a backup.

If your employees have business expenses, ask them to turn in an electronic copy of their receipts, too. Online programs, like Workful, make this process easy for you and your employees. Your employees can submit their receipts, and you can approve the expense in seconds.