Are you trying to assess your company’s financial health? Do you want to make sure your company remains afloat?
One of the best ways to do this is to create an expense report for your company. This is a spreadsheet that details how much money you’ve spent to keep your business running.
It gives you an idea of whether your profit margin is growing, decreasing, or remaining stagnant. Without it, your company’s financial health will be in dire straits.
Here’s how to get started with expense reporting:
Keep Receipts
When you start your expense reports you want to ensure that you record every expense, no matter how small it is. You want to keep your receipts for two reasons:
- To ensure accurate reporting
- To show proof of purchase in the event of a tax audit
It’s always best to keep a printed and digital receipt for each expense. While you can pay in cash, you might wish to pay with your company’s credit card to prove that this was a business expense.
Analyze the Numbers
The next step is to analyze the numbers carefully when creating your expense reports. This is often challenging for many entrepreneurs as they might end up missing an expense or forgetting to record certain numbers.
You might want to use Bentoforbusiness.com to help you record your expenses on your spreadsheets. You want to ensure that you update your expenses as soon as you’ve made your payment.
Here are the expenses you should lookout for:
- Employee and contractor wages
- Taxes
- Stationery
- Rent/Mortgage
- Internet
- Tech products (hardware and software)
These are often the most common expenses for many entrepreneurs. You want to keep track of how much you spend on each of these expenses. Make sure you also keep records of your average weekly and monthly payments.
You want to make sure that you keep your expenses as low as possible. If you see a huge jump from month to month, then you might want to cut down on expenses.
Track Your Assets As Well
One of the most overlooked aspects of preparing your business budget is to track your assets as well. When you keep track of your assets, you’ll have a better idea if you can cover your expenses.
Let’s say that you have to spend $10,000 per year on your office rental expenses. Let’s suppose your business owns 20 troy ounces of gold bullion valued at $1,000 per ounce which can cover these expenses.
Make sure you record the gold bullion in your expense reports. This gives you an idea of whether you can afford the yearly rent.
Create Your Expense Report
Now you know the benefits of an expense report and how to create one for your business.
Your first step should be to always keep receipts of every purchase. You want to spend using your company’s credit card to ensure that you can record your purchases as business expenses.
Make sure you always analyze the numbers to assess your company’s financial health. Ensure that you also track your assets as part of your expense reports.
You can find more great business tips on our blog!
