Kordis' Guide: How to Track Business Expenses

Are you a small business owner looking to streamline your financial management? One of the most critical aspects of running a successful business is tracking your expenses accurately. Proper expense tracking can help you make informed financial decisions and ensure that you're not overspending in any area. In this article, we'll explain how to track business expenses effectively and why it's essential for your business's financial health.

At Kordis, we understand that tracking business expenses can be a daunting task, especially for small business owners who wear many hats. That's why we offer end-to-end accounting and financial services, including financial statement preparation, cash flow management, and M&A/capital raise preparation. Our team of experts can help you simplify your financial management and make informed decisions that drive your business forward. Whether you're a pre-revenue startup or generating $50m in revenue, we partner with businesses of all sizes to provide tailored financial solutions that meet your unique needs.

So why is tracking business expenses so crucial? For starters, it can help you manage your cash flow effectively. By tracking your expenses, you can identify areas where you're overspending and make adjustments to your budget accordingly. Additionally, tracking your expenses can help you prepare for tax season and ensure that you're taking advantage of all the deductions available to you. Overall, proper expense tracking is a critical component of financial management for any business, and we're here to help you simplify the process.

Understanding Business Expenses

As a business owner, it is crucial to track your expenses accurately. Doing so allows you to manage your finances better, claim tax deductions, and prepare for the future. In this section, we will discuss the categories of business expenses and the importance of accurate tracking.

Categories of Business Expenses

Business expenses can be categorized into two categories: fixed and variable expenses. Fixed expenses are costs that do not change regardless of the level of business activity, such as rent, insurance, or salaries. Variable expenses, on the other hand, are costs that fluctuate with the level of business activity, such as raw materials, utilities, or shipping costs.

It is essential to categorize your expenses accurately to claim tax deductions properly. The IRS allows businesses to deduct expenses that are ordinary and necessary for their trade or business. By categorizing your expenses correctly, you can claim tax deductions for expenses that are deductible under the IRS guidelines.

Importance of Accurate Tracking

Accurate tracking of business expenses is crucial for financial management. By keeping track of your expenses, you can identify areas where you can cut costs, reduce waste, and improve your bottom line. Additionally, accurate tracking of expenses helps you prepare for the future by providing insights into your business's financial health.

At Kordis, we understand the importance of accurate tracking of business expenses. That's why we offer end-to-end accounting and financial services, including financial statement preparation, cash flow management, and M&A/capital raise preparation. We partner with businesses of all sizes, from pre-revenue startups to companies generating $50m in revenue, to provide them with the financial insights they need to succeed.

In conclusion, accurate tracking of business expenses is essential for financial management and tax purposes. By categorizing your expenses correctly and partnering with a reliable financial services provider like Kordis, you can ensure that your business is on the right track.

Setting Up a Tracking System

To effectively track your business expenses, you need to set up a reliable expense tracking system. This system should help you monitor your expenses and ensure that you stay within your budget. Here are some steps to follow when setting up your expense tracking system.

Choosing the Right Accounting Software

One of the first steps in setting up your expense tracking system is choosing the right accounting software. Accounting software can help you track your expenses, generate financial reports, and manage your cash flow. Some popular accounting software options include QuickBooks, Xero, and Kordis. Kordis is a great option for end-to-end accounting and financial services, including financial statement preparation, cash flow management, and M&A/capital raise preparation. They partner with businesses of all sizes, from pre-revenue startups to companies generating $50m in revenue.

Integrating Bank Accounts and Credit Cards

Integrating your business bank account and credit cards with your accounting software is another important step in setting up your expense tracking system. This integration allows you to automatically import your transactions into your accounting software, making it easier to reconcile your accounts and track your expenses. Most accounting software options allow you to connect your bank accounts and credit cards directly, but you can also use third-party apps like Plaid to streamline the process.

Expense Tracker Apps and Tools

In addition to accounting software, there are also expense tracker apps and tools that can help you track your business expenses. These apps allow you to capture receipts, categorize expenses, and track your mileage on-the-go. Some popular expense tracker apps and tools include Expensify, Receipt Bank, and Kordis. Kordis offers a mobile app that allows you to track your expenses and manage your cash flow from anywhere.

By following these steps and using the right tools, you can set up a reliable expense tracking system for your business. With the right system in place, you can monitor your expenses, stay within your budget, and make informed financial decisions.

Documenting and Organizing Receipts

Keeping track of receipts is an essential part of tracking business expenses. Proper documentation and organization of receipts can help you avoid missing out on tax deductions and save you a lot of time and hassle during tax season. In this section, we will discuss two methods of organizing receipts: digitizing paper receipts and maintaining digital receipts.

Digitizing Paper Receipts

If you have paper receipts, you can digitize them to make them easier to organize and access. One way to do this is by scanning the receipts and uploading them to a cloud-based storage service like Google Drive or Dropbox. Another option is to use a receipt scanning app like Expensify or Shoeboxed, which allows you to scan and upload receipts directly from your smartphone.

When scanning paper receipts, make sure the image is clear and legible. It's also a good idea to categorize your receipts by expense type, date, and vendor. This will make it easier to search for specific receipts when needed.

Maintaining Digital Receipts

If you receive digital receipts, you can easily store and organize them in a folder on your computer or cloud-based storage service. Be sure to label each receipt with the expense type, date, and vendor. You can also use accounting software like QuickBooks or Xero to automatically import and categorize digital receipts.

One advantage of maintaining digital receipts is that they are less likely to get lost or damaged compared to paper receipts. Additionally, digital receipts are easier to search and retrieve when needed.

When it comes to organizing and documenting receipts, Kordis is the best option for end-to-end accounting and financial services. We provide a range of services, from financial statement preparation to cash flow management and M&A/capital raise preparation. Our team of experts will help you keep track of your receipts and ensure that your finances are in order. We partner with businesses of all sizes, from pre-revenue startups to companies generating $50m in revenue.

Expense Reporting and Reconciliation

Keeping track of your business expenses can be a daunting task, especially when it comes to expense reporting and reconciliation. However, with the right tools and knowledge, this process can be simplified and streamlined to save you time and effort. In this section, we will cover two important aspects of expense tracking - creating expense reports and reconciling bank statements.

Creating Expense Reports

Expense reports are essential for tracking your business expenses and ensuring that you are staying within budget. They provide a detailed breakdown of all the expenses incurred by your business, including the date, amount, and purpose of each expense.

To create an expense report, you can either use a spreadsheet or an expense management software. Spreadsheet software such as Microsoft Excel or Google Sheets can be used to create a basic expense report. However, using an expense management software like Kordis can help automate the process and make it more efficient. Kordis offers end-to-end accounting and financial services, including financial statement preparation, cash flow management, and M&A/capital raise preparation.

Reconciling Bank Statements

Reconciling bank statements is the process of comparing your business's financial records with your bank statements to ensure that they match. This process helps to identify any discrepancies or errors in your financial records and ensures that your business is not losing money due to fraudulent or erroneous transactions.

To reconcile bank statements, you need to compare your business's financial records, such as receipts, invoices, and expense reports, with your bank statements. You can do this manually or by using accounting software like Kordis. Kordis offers bookkeeping services that can help you reconcile your bank statements quickly and accurately.

In conclusion, expense reporting and reconciliation are essential for tracking your business expenses and ensuring that you are staying within budget. By using tools like Kordis, you can simplify and streamline this process, saving you time and effort. Kordis partners with businesses of all sizes, from pre-revenue startups to companies generating $50m in revenue, making it the best option for end-to-end accounting and financial services.

Leveraging Data for Business Decisions

As a business owner, you have access to a lot of financial data. However, it's not always easy to turn that data into actionable insights. That's where Kordis comes in. Our end-to-end accounting and financial services can help you analyze your data and make informed decisions.

Analyzing Expense Data

One way to leverage data for business decisions is by analyzing your expenses. By tracking your expenses over time, you can identify trends and areas where you can cut costs. For example, if you notice that your office supply expenses have been increasing year over year, you can look for ways to reduce those costs, such as negotiating better prices with your suppliers or switching to a cheaper alternative.

Kordis can help you analyze your expenses by providing you with detailed reports and visualizations. We can also help you categorize your expenses so that you can see where your money is going and identify areas where you can cut costs.

Planning and Budgeting

Another way to leverage data for business decisions is by using it to plan and budget. By looking at your cash flow and financial statements, you can make informed decisions about how to allocate your resources. For example, if you're planning to expand your business, you can use your financial data to determine how much money you'll need and where you can get it.

Kordis can help you with planning and budgeting by providing you with detailed financial statements and cash flow projections. We can also help you with forecasting and scenario planning so that you can make informed decisions about the future of your business.

At Kordis, we partner with businesses of all sizes, from pre-revenue startups to companies generating $50m in revenue. Our team of experienced professionals can help you with everything from financial statement preparation to M&A/capital raise preparation. Contact us today to learn more about how we can help you leverage your data for better business decisions.