To succeed in business, small business owners must keep a close eye on expenses. Poor expense management can destroy your profit on a project or business venture. A component of expense management is expense tracking.
If you’re not keeping track of your expenses, it’s easy to go over budget. Even if you’re still making a profit and don’t think you need to pay close attention to them, if you don’t have good records you won’t be able to take all your allowable deductions on your taxes.
How important is it to Track Business Expenses?
Without detailed, monthly information on your business’ performance, it’s easy to be running at a loss for several months and not even be aware. Cash flows which don’t align, such as customers pay deposits or large sums before you incur expenses on those projects, can mask your businesses true financial health.