Today, I’m going to talk about a really easy way to keep track of your business expenses. This is going to simplify things and make tax season go a lot smoother. Watch the video below to learn how to track business expenses.
How to Track Business Expenses – Transcript
First, download this handy-dandy app on your phone called “Expensify.” Go to the app store and Google “Expensify.” I’ve used it for a number of years and with this app, you’re going to scan in all of your paper receipts. It’s fast, super easy and is especially handy when you’re traveling!
If you’re out on a FAM trip or just out and about buying stuff for your business and you make a purchase, grab your phone, open up Expensify and scan your receipt. The app has preset up categories. You can just click and tag for whatever category it is. If you’re eating out and it’s not a business trip, the IRS requires you to say who you’re having lunch with to confirm it is a business expense, (unless it is specifically a business trip) then you can add a quick note. It’s really fast and easy.
When I’m traveling, if I’m in a big hurry and I don’t want to spend the 3 extra seconds to scan a receipt, then what I do is put the receipts in my purse briefcase pocket. Once I get back to the hotel or back to my house, I’ll pull them out and quickly scan. It’s super simple.
For all of the receipts that you get via email because I know most of the things that we buy for business like online tools, memberships, how we deal with email receipts is we save them in a set of folders that we’ve got set-up within Dropbox. The folders are all set-up to match the line items on our tax return. This makes it simple because you get the receipt and you just save it in the correct folder and then they’re all organized and all ready for tax time. It saves money so you can pay your bookkeeper less because you’re way more organized and it just saves you a lot of time, headache and stress preparing for tax season. That’s what we do with email receipts. Here is a screenshot of our folder system we use in my business. Copy and adjust it for you.
I live in the US so if you’re in Canada, the UK or somewhere else, your line items on your tax return might look different than mine or if your business is structured differently maybe they look different. Make the adjustments accordingly.
One thing I forgot to mention with Expensify that also makes it such a beautiful app to use is that it will integrate a lot of the different accounting software such as Quickbooks. You can link it right to your Quickbooks. If you use Quickbooks, it will plug your receipts right in there which is super handy.
We don’t use Quickbooks, we use another software tool that Expensify doesn’t integrate at this time but my bookkeeper just logs into Expensify once a month and downloads all those receipts. Usually the receipts are already tagged but if I forgot to tag one or forgot to add a note, she’ll take care of it for me. All of our receipts go right into our folder system so they’re all organized and ready for tax season.
It is really an efficient way to keep track of your business expenses so that tax season can go a little more smoothly. So an already not so fun time a year can be just a little bit better, a little bit easier.
If you have some additional tips on how to make tax season go better and more smoothly please share them. We’d love to hear it. We could all mastermind together and use them as great tax tips. And if you already use Expensify, I would love to hear how you like it. Tell me in the comments below.
Love & Success,
Heidi and Your Marketing Team