How to track expenses and make sure they are legitimate

There are at least two good reasons for you to track your business expenses. One reason to track business expenses is for tax purposes.At the end of the business year, you can claim tax deductions for all of your legitimate business expenses.The other reason to track business expenses is to keep your eye on your money and avoid paying for non-business items claimed by employees.

In order to track you expenses for tax purposes, you might consider using computer software to help track and organize business expenses.If you have a larger company, consult with your administrative assistant, financial officer, or whoever is in charge of the tracking of money in your company.Find out what sort of software he or she recommends for your particular situation.If your company is smaller, you might be the person in charge of all the money.If this is the case, you will likely want a simple program that allows you to organize your deductions.

You can find software at media outlets or on the internet.Look into the products available and try to find a simple program that works for you.If you are registered with an online company like Organizer Deluxe or another business related site, you may be allowed to download the software for free.Make sure you have the option of printing out summary reports, altering the template to meet your business needs, and that there are instructions and examples that make entering and handling the data easy.

Find out what qualifies as a deductible business expense and set up categories for these items.At the end of the year, you will be able to copy the record for your CPA and deduct all legitimate expenses easily.

The other reason to track business expenses is to guard against employee theft.The more people you employ, the harder it is to keep track of all of the money and the easier it becomes for employees to have you do things like fill up their gas tanks and pay for their phone calls.

One way to protect yourself against the illegitimate use of your money is to be diligent about looking at credit card receipts.If you have any questions at all, ask the employee.Sometimes problems are just a case of poorly defined boundaries.If there is a bill for a $200 dollar dinner and you want to know the details, ask.You set the boundaries for what is and what is not an acceptable use of the company card.Similarly, you should review all items purchased and all vehicle expenses.

By using a corporate credit card, you will be able to keep track of expenses better because they will all be accessible and they will all be in one place.Be sure to go over each item at least once a month.Do the same thing for "business calls"-your employees can pay for their own private calls.Look at the company phone bill once a month and make sure that you have business in the different locations that you are paying to call.You might not lose much money on non-business phone calls but an employee that thinks it is okay to use your dime to make a call might also decide that it is okay to use your dimes for other personal business.

Be diligent about tracking business expenses.This will not only help you at tax time, it will also help you set boundaries with employees before spending gets out of control.If your company gets so large that it is hard for you to track the expenses, it is time to hire someone who can help you with this task.