It is important for businesses both big and small to keep track of their expenses. Even a very small business with only a few employees should understand its financial situation. Ignorance, after all, is not bliss. It’s just expensive.
To help keep track of where money is going to, it can help to map out expenses by category. This will not only help any business plan for the future, but it will also be a big help when it comes to tax time.
While you can’t foresee every single business expense, you can definitely pick out some of the more common ones. These are the biggest expenses, and the costs that reoccur.
Which expenditures am I talking about? Read on to find out.
Businesses come in all sorts of shapes and sizes, but even the smallest one has location costs. This might include the mortgage or lease on a property, the cost of utilities like electricity, heat, and water, and services like internet, phone, and even property maintenance. These services may be more difficult to record when the business is run out of a home office, but you can calculate a business expense deduction based on the area of the home that is used exclusively for work. Professionals offering bookkeeping services can help entrepreneurs sort these issues out.
Wages, Salaries, & Benefits
A significant portion of a business’s expenses can be the wages, salaries, and benefits of its employees. Because there are different types of employees who may be salaried, or paid by the hour, and eligible for different types of benefits, it can be an intricate puzzle sorting this out. There are business services for entrepreneurs that can be a big help in tracking the complexities of employees wages, salaries, and benefits.
All businesses need some office supplies. Paper, printer ink, equipment rental, post office expenses, and cleaning supplies are a few of the more common expenses that most businesses will acquire. Depending on your business, there will be other expenses you will need to track that are specific to your industry. If this seems like an overwhelming task, a virtual office assistant can not only help you determine types of expenses but track them as well.
Advertising & Marketing
Marketing your business can make up a significant portion of your business expenses. This might include print or digital advertising, like newspaper, magazine, or online ads, or promotional materials and products. If you attend seminars or trade shows, there will be business expenses to track there. Be sure to consider all aspects of advertising like free samples and even website costs.
Loans, Lines of Credit, & Taxes
Don’t forget to account for loan repayment and maintenance, as well as lines of credit, credit cards, and bank fees. Bookkeeping services can be invaluable help in tracking your expenses in this area. You might also need to consider other fees, like professional associations or trade groups. All of this should be included in your business expenses.
At The End Of The Day
Of course, there will be expenses that you incur that are specific to your industry and instance; however, regardless of your circumstances, it is essential that you track expenses so you can understand the financial health of your business. It also makes tax time much easier. But don’t panic if this seems like an impossible task. Consider the help of professional bookkeeping services or virtual office assistant who offer business services for entrepreneurs. They can not only free up your time so you can focus in on the parts that matter most to you, but they can also help you save money and headache in the long run.
Need help streamlining your business expenses and creating a more robust bottom line? Drop me a line! From administration to bookkeeping, my specialized services for professionals can help.