When it comes to performing the tasks essential to properly manage your business, expenses are often at the bottom of the precedence list. But even although it may appear to be an ordinary task, keeping track of your personal business expenses can make our work lives a lot easier. Not only that but it can even make tax time somewhat stress free.
we spoke with Business Advice Specialist Group to find out how to precisely record your personal business expenses. Below are our top five tips that will make keeping track of your personal expenses easier than ever.
- Keep your business and private expenses separate.
While this may appear to be an apparent tip, it is among the main reasons why many people find keeping track of their expenses complicated. For example, if you use your car for both business and pleasure, then how do you properly claim these expenses? In order to properly claim sometimes unclear expenses, it is crucial that you do your research what qualifies as a business expense. Reading about the subject is the only way to be certain you are keeping track of your expenses properly.
- Keep all documentation for your business expenses.
Some people think that a straightforward checklist or credit card statement is enough proof of business expenses. Unfortunately, that’s not the case. It is extremely important that you keep everything documentation for your business expenses, doing so will make the claim easier. Therefore it is a good idea to at all times ask for receipts or tax invoices for each purchase.
It does not matter how big or small the acquisition is, these small expenses can add up over time, so it is a good idea to have a receipt as proof of purchase. It’s a good idea to label your receipt with all the relevant information as soon as you receive it. This can save you time trying to factor in your expenses at tax time.
- Get a separate account for your business and use it.
While the costs related to a business account can be higher than your personal bank account, having separate accounts is the only way to really keep your expenses organized. Having a separate account for your business is the simplest way keep your expenses entirely separate. Being able to deposit all your income into separate accounts and make business-related payments from the same account is an excellent way to keep things in check.
- Keep track of your mileage related to your business.
Whenever you travel in one of your vehicles, make sure to do so record mileage.
The best way to do this is to write down the mileage or kilometer readings at the start and end of each business-related trip. It’s a good idea to keep this information in a notebook together with the date, time, and location of the trip. If you keep this notepad with you, you are also less likely to forget to jot down every trip.
- Keep all of your records for the tax year in one place.
Good how to manage your expenses is to keep all of them in the same place. Having all of your information, receipts, bank statements and other important information in one place will make all of your accounting a breeze. Having this information organized by fiscal year makes the accounting process quick and straightforward.
The five easy tips mentioned above are easy to implement in your work lifestyle. Having these good habits and dedicating a little time to following these tips will make tax time more bearable. Implementing these rules into your daily routine will also make all your bookkeeping and record keeping a lot easier.
