Business Expenses: How to keep track of them

Frederik Farrell

Every business, from large corporations to small home-based operations, is going to incur business expenses during their regular course of enterprise. Each year, these expenses will accrue, and it is important for every owner to manage their finances in a way that tracks their expenditures accurately and efficiently, while also being simple to use and understand. In order to accurately record all of your tax deductions, this will be especially true. 

Let’s take a look at the various components of what your business most likely needs to consider for this particular area of operation.

Where to Begin With Business Expenses

Any venture is sure to need a solid platform to base its foundation on, and this means accurately accounting for the initial phase. As your ambitions grow, so will your need for more resources and, avoiding running out of money is one of your main responsibilities as a startup CEO.

One critical question that many businesses fail to recognize may seem like an obvious one: what are the actual initial costs?

Here is a quick breakdown of three key areas of concern when it comes to getting your business launched.

1. Get your financial spreadsheets revved up, and make sure you calculate your kick off costs before opening your doors

Many startups fail simply due to poor planning from the outset. Don’t be quick to introduce new liabilities without first completely ensuring that you can handle them. Keeping on top of your bills from day one will ensure your startup is given the best chance to succeed. This may also include any investor-related plans, estimating profits, a comprehensive breakeven analysis, or even securing loans.

This financial model template can help.

2. Find out what all of your operational costs will actually be

From a day to day perspective, no matter what size your company might be, there will be unavoidable, daily business expenses. Maybe this is just the cost of the electricity to power your laptop and your daily lunch, or perhaps it is a much larger investment. Every business will have different needs, and it will be important to determine if you are a small online service, a brick-and-mortar shop, or some other type of operation. For starting out though, the main consideration here is based on whatever a “normal” day of operation might look like for your company, even including those much-needed SaaS expenses.

3. Calculate everything and secure financing

Now that you have looked at all of the books and are certain you can keep score of exactly where you are at with your business, it’s time to secure funding. No matter how you do this, there will be some sort of investor or backer who will want to know exactly how you plan to utilize the funds in order to create a beneficial outcome for the relationship. Make sure that you are prepared to answer any questions that could come up related to this aspect of development.

If you were an investor, what questions would you have for someone in your shoes?

Now that you have seen some of the basic starting points that will get your business headed in the right direction, you are going to need to dive deeper into how you can stay thriving. This is where the various tools and resources that Monthly can help you stay on top of with ease.

Monthly is a one-stop-shop designed to keep all of your SaaS expenditures on track by helping you manage your subscription software and tools in a simple manner. Before diving too deep into that though, there are a few more key points that you are going to need to take into account for your costs to operate.

Automation as your business ally

The bottom line when it comes to finances is that you are going to need to employ some sort of automated services for keeping track of things, wherever possible. In fact, some companies have even invested directly towards infrastructure growth in order to handle this area of concern accurately and efficiently. For whatever type of business you are conducting, it is imperative that you have a secure and proven method for bookkeeping and record-making of any financially related debts.

All things being even, here are some initial main concepts that might get your wheels turning in the right direction about how to maintain an accurate picture of your operations.

  • What apps, software, or other automatable tools can you connect to your daily business operations and be confident about using?
  • Are there any new apps, software, techniques, or approaches to analyzing a potentially outdated sector of your company?
  • If you are successful one month but not very successful the next month, how much loss will you experience?
  • What might it cost to rent your business property continually, and what are the utilities associated with that?
  • What are the wages that your employees command, and do you have any salaried employees?
  • Do you have typical office supplies or stationery that you need for your employees to conduct regular business interactions?
  • What about insurance costs, legal fees, anything related to health and safety, retirement plans, or even ongoing licensing costs?
  • What does your marketing department look like, and do you need an ongoing expense report generated for keeping track of that?
  • Does your company only have one employee, and if so, what are the non-typical business expenses that you experience?
  • How do you keep track of all of your quarterly goals, and whether or not they are being met with ease?

This is not meant to be a comprehensive list, but answering each of these questions accurately will get you headed in the right direction about considering what your areas of concern are for your particular business. Of course, you will want to consult with a registered accountant or tax specialist if you have any specific questions related to your situation.  

At the end of each day, you want to know that you will be able to figure out the bottom line achieved from the accomplishments of that day, and you will most likely deploy a unique set of tools and resources to stay on top of getting there. But how do you make sure that you are staying on top of all of your tools and resources themselves?

This is where the Monthly app will help alleviate many of your concerns with regards to maintaining a clear picture of where you are and where you are headed when it comes to your SaaS expenses. Sign up now to begin tracking your SaaS and optimize for greatness.

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