When you start own a business it is an important to track where you’re spending your money. However you spend it, QuickBooks can do a lot of the hard work for you and you can keep tabs on your spending right from your dashboard. It shows you exactly how much you’re spending in each category

expenses with QuickBooks Step by step instructions.

  • The first time this happens, it’s up to you to review and categorize your expenses. It helps you categorize one month of transactions, then you can finish the rest later. The first transaction you see is an expense. If possible QuickBooks fills in; who you  paid and what it was for. You can change this information if you need to in this     case.

  • This is where QuickBooks starts to helping you out it found other expenses that look like the one you just added and has assigned them all the same category.

  • If you see a category in blank, that is a QuickBooks best guess for how to categorize this transaction. If it’s a wrong guess just change the category and QuickBooks learns for next time. You can also add a picture or a P.D.F. of the receipt to the expense which is a huge benefit for tax time.  

Expense categories

Common types of business expenses include:

  • office costs, e.g. stationery or phone bills

  • travel costs, e.g. fuel, parking, train or bus fares

  • clothing expenses, e.g. uniforms

  • staff costs, e.g. salaries or subcontractor costs

  • things you buy to sell on, e.g. stock or raw materials

  • financial costs, e.g. insurance or bank charges

  • costs of your business premises, e.g. heating, lighting, business rates

  • advertising or marketing, e.g. website costs

5 Tips for Tracking Your Business Expenses

1.Create a business bank account. If you’re a sole proprietor with a new business, you may not have made it a priority to segregate your business and personal funds. If that’s the case, don’t delay it anymore: Put all of your business income directly into a business account, and use a business credit or checking account for any business-related purchases that can be paid by card. You can move money from one account to the other as necessary, but drawing a clear line between the two accounts will help you easily keep track of whether you’re  business or personal purchases. Creating a business bank account will also build up your business credit, which will come in handy if you might need financing in the future.

2.Stay on top of your receipts. When you get receipts for business-related purchases, store them in envelopes or shoe boxes and then file them in an accordion file, organized by month. If you’re audited, you may need these receipts as evidence of your business purchases.

3.Use an online calendar to note your expenses as they occur. An online calendar tool like Google Calendar can be used to set up notifications for recurring or one-time expenses. Use the event form to write down the type of expense (i.e., utilities, rent, contractor services), and the recipient of the funds. You can set up alerts to remind you to pay upcoming expenses before they are due, and you’ll be able to print out the entire calendar for reference when the next tax time rolls around. Bonus: Many online calendars, like Google Calendar, can sync with your cell phone, so you can even enter expenses on the go.

4.Use software to track and analyze your business purchases. Most accounting software programs provide options to create expense categories and link them to line items on your tax forms, which will reduce the time spent on preparing your tax returns. These programs can also be used to generate profit-and-loss statements, so you can easily assess the financial health of your business.

5.Hire a bookkeeper. If your company is growing too big for you to accurately track all of your expenses, or if you simply don’t have a head for numbers, you may want to consider hiring a bookkeeper on a contract basis to spend a few hours each month going through your receipts and invoices and tracking them in accounting software. A good bookkeeper will generally cost anywhere from $20 to $50 an hour, which is well worth it if it helps you stay out of trouble with the IRS.

Source article:How to manage your expenses with QuickBooks