How I keep up with business expenses
1. Keep every receipt from any expense that you incur for your business.
Here are some examples:
- Gift bags for delivering products
- Items needed to make gift baskets
- Hostess gifts
- Lacons, sample containers, spatulas, etc.
Basically anything that you wouldn't have normally bought or could use for other purposes such as buying a skirt or fingernail polish..something like that. (Unless you're giving those items away as a hostessing gift, raffle, etc.)
2. Buy a notebook ( business expense..keep the receipt)
and a small pouch or heck even a ziplock would work.
During the month stick all of your business expense receipts in the pouch. At the end of the month set aside a time to get them all out and put them in the notebook.
So if I started my business in June for example I would write " June 2014" on the top corner of the page and I typically tape them onto the page and write out the total amount I spent next to the receipt and what it was for.
then proceed to put all of my June receipts in order in the notebook.
Then once that month is done you start over with the new month. I've found this usually keeps me on track and able to have everything in order for tax time. It also makes it easier to be able to know at a glance if you're in the good with expenses vs income.
A few other tips:
- Whenever you're finished putting in all of the monthly expenses, total them up and write the total in parenthesis next to the month in the upper right hand corner, it'll make everything more streamlined during tax season.
- When a notebook is filled put it in your business binder ( more to come later on that one) or whatever safe spot you keep your other tax records
- If you've got questions over what is or isn't considered a business expense check out the official IRS business expense page
Like I said before, the notebook method works for me, but if you're more a fan of the digital life. You can always scan the receipts and keep track of them and any expenses on your computer using Excel or THIS awesome free tool.