How to Track Expenses?

Imagine checking your business bank account and feeling a wave of uncertainty. Are you making a profit? Are you overspending without realising it?

Not tracking your expenses can make it hard to answer these questions with confidence. You might be pouring money into marketing campaigns that aren't delivering, or overlooking simple ways to cut costs.

Finding the best way to track expenses can help you find the financial clarity you need to make smart decisions and grow your online business. This blog post will help show you why staying organised is so important and guide you through some of the best methods to keep your finances on track.

Not keeping a firm grip on your expenses could lead to a whole host of problems for your online business. Here are a few of the downsides:

• Inaccurate profit calculations: You might think you're making a profit, but without tracking expenses, it's hard to know for sure.
• Missed opportunities for cost savings: You can't fix what you don't track. Keeping tabs on your expenses can reveal areas where you're overspending without realising it.
• Difficulty securing funding: Lenders and investors want to see that you have a handle on your finances. Disorganised expense tracking can make it harder to secure funding for growth.
• Poor financial decision-making: Without a clear picture of your expenses, you're essentially flying blind when making important business decisions.

No matter how big or small your online business is, there's an expense tracking method out there that can work for you. Let's explore a few options, using the example of an online book seller:

For many new online booksellers, a simple spreadsheet is a great place to start tracking expenses. It's free, customisable, and easy to understand. Imagine keeping separate tabs for different expense categories, like book purchases, shipping costs, and website fees.

Pros: Affordable, customisable, easy to learn.

Cons: Can become time-consuming and prone to errors as your business grows.

Expense-tracking apps can help automate many of the tedious tasks associated with expense management. Think about using an app to snap photos of receipts, automatically categorise transactions from your business bank account, and generate expense reports with a few taps on your phone.

Pros: Automation saves time, receipt capture eliminates clutter, and bank syncing helps ensure accuracy.

Cons: Some apps come with a subscription fee, and features vary between apps.

For established online booksellers or those who want more robust financial management tools, accounting software can be a worthwhile investment. These platforms often offer advanced features like invoicing, inventory management, and financial reporting.

Pros: Provides a comprehensive financial overview, streamlines accounting tasks, and often integrates with other business tools.

Cons: Can be more expensive than other options, and may require a learning curve.

Ready to take control of your business finances? These practical tips can make expense tracking a breeze:

• Separate Business and Personal Finances: Open a dedicated bank account for your business transactions. This can help make it easier to track income and expenses separately.
• Go Digital with Receipts: Say goodbye to shoeboxes full of faded receipts! Use an app or scanner to create digital copies of your receipts.
• Categorise Everything: Assign each expense to a specific category (e.g., advertising, supplies, travel). This gives you a clearer picture of where your money is going.
• Schedule Regular Tracking Time: Don't let expenses pile up! Set aside time each week or month to review and categorise your transactions.
• Automate What You Can: Take advantage of technology! Use bank feeds, receipt scanning apps, and other tools to automate expense-tracking tasks.
• Review and Analyse Regularly: Don't just track and forget! Regularly review your expense reports to identify trends, spot potential savings, and make informed business decisions.

Tracking your expenses doesn't have to be a chore. By implementing the right systems and making it a habit, you can gain a clear understanding of your business finances, make informed decisions, and set yourself up for success.

Remember, what gets measured gets managed. Start tracking your expenses today, and help your online business thrive.

And if you're looking for ways to expand your reach and connect with amazing customers, selling on Amazon can be a great option to explore.