What to look for in a business expense tracker
Small business owners have a lot going on at any given time. You likely have a business bank account to manage. You probably work with employees or freelancers, which entails time tracking and added financial stress. This isn't to mention your yearly prep for the IRS, which involves gathering paper receipts, mileage tracking, and various other pieces of information that ensure you file a correct tax return. Fortunately, business expense trackers exist to make all this easier.
A number of companies make business expense trackers for computers and mobile devices. Each of them aims to do the same thing: Make it easier for you to stay on top of your business finances. To help you decide on a business tracker, let's take a look at what this tool does, whether you need one, and what you should look for.
What's a business expense tracker?
Business expense trackers are essentially a specialized type of expense reporting tool that focuses solely on business. Trackers will crunch your finances and give you a thorough look at your spending, income, ongoing expenses, upcoming costs, and more. Ultimately, business expense trackers exist to streamline your finances.
For a better idea of what a business expense tracker does, consider what manual bookkeeping looks like. You, your accountant, or your bookkeeper collect all paper receipts, invoices for travel expenses, digital receipts, utility bills, and more. Then, you take these pieces of information and write them down or enter them into an Excel document or other spreadsheet. From there, you'll use manual number crunching or Excel formulas to tally up your monthly expenses.
You will then repeat the above process for quarterly and yearly expenses, as well as any financial projections. There's nothing inherently wrong with this process, but it does have some downsides. First, it takes you or a financial expert a significant amount of time — and, especially in the case of startups, time is money. This process also doesn't yield real-time results. All that data entry takes time. It doesn't usually happen on the spot.
Do you need a business expense tracker?
Business trackers are likely sounding pretty great, but they’re not always necessary. Still, if you have more than a few expenses a month, you should consider getting one. A tracker will take the above process and streamline it into nonexistence.
Instead of manually entering various pieces of data, your expense tracker will sync with your online accounts and pull that information. It will also likely have all the financial formulas baked in, making it easy to get the numbers you need.
Business expense trackers can provide near real-time financial information. This can help you stay on top of your business, make it easier to perform regular financial projections, and make unwanted surprises a little less likely. For example, if you're using a business expense tracker, you can more than likely receive automated alerts that notify you of upcoming expenses or high spending.
Business expense trackers can also simplify your life in a big way if you have numerous employees, especially employees who travel. Tracking mileage is a big part of expense management. But, tracking mileage entails gas receipts, mileage reports from employees, and even tracking apps. Some business expense trackers will actually sync to mobile devices and track travel expenses and mileage for you.
In short, your life as a small business owner can be significantly easier if you pick the right business expense tracker. But, not all business expense trackers contain the same features.
What to look for in a business expense tracker
We've established that tracking expenses can be easy with a tracker. But, you need an expense tracker with the right features. The best business expense tracker will have these six features — and maybe more.
1. Mobile app
There's a big chance you have a smartphone. Find a business expense tracker that works with your Android or iPhone, as this will allow you to tackle your finances on the go.
With an expense tracker app, you'll be able to utilize many of the upcoming features and receive mobile alerts. Many expense tracking apps will even notify you of various types of financial activities.
2. Receipt scanning
Manually entering receipt information is a time-consuming process. This is time you could be spending on marketing your business, pushing your next project, or relaxing and enjoying the fruits of your labor. Find an expense tracking app that allows you to scan receipts.
With receipt scanning, the information from your receipts transfers into the app, no manual entry required. This can save you time and ensure the numbers are entered accurately.
3. Mileage tracking
If you or your employees travel at all, mileage tracking can be your biggest time saver. Manually tracking miles and gas is a chore. With mileage tracking on your app, you can enable the program to run in the background and have your mileage automatically tracked. This saves you time and will likely result in a far more accurate number.
4. Credit card syncing
Some business expense tracking apps will sync with your credit cards. This allows your business card purchases to be automatically entered into your expense tracking app, which in turn saves you the trouble of having to manually enter them when you're ready to create an expense report. Coupled with a mileage tracker for business trips, these two features alone can save you a lot of time.
5. Offline functionality
Not all business expense trackers will allow you to make changes or enter information offline. Look for one that features offline functionality, as you never know when your internet will be out. This is especially important if you're traveling a lot, as you may find yourself in a dead zone with receipts to add.
6. Time tracking
Just like mileage tracking, time tracking will make it possible for you to track your or your employee's time and have it automatically entered as a business expense. Between mileage, credit card, and time tracking, you're able to track expenses that would otherwise eat up a lot of your valuable time.
The above features will ensure your business expense basics are covered. Beyond those features, anything else is an added bonus. For example, some apps may sync with your existing data in Evernote or Google Keep to fill in important data points. Others may feature Quickbooks integrations. As long as you have the above features, you'll be ready to save time.
Tracking expenses to save time and money
A business expense tracker will save you time, money, and headaches. Best of all, many business expense trackers will be free or very inexpensive. There are a number of trackers out there, so do some digging and look for one with the aforementioned features. Once you've got a business expense tracker in place, you'll quickly find yourself with more time, more money, and fewer financial headaches. That's something you can't put a price on.