The days are getting longer. The first signs of spring are here. And tax season is just around the corner. You know what that means? Tracking your small business expenses.

If that last sentence fills you with a sense of dread as you struggle to remember the last time you looked at your small business expenses, you’re not alone. Small business owners have plenty of balls to juggle and staying on top of your finances can often end up at the bottom of your to-do list.

…Which leads to headaches come tax time as you try to dig through your inbox and root out your paper receipts before your filing deadline.

What you need is a system to help with your small business expense tracking— a system that won’t have you dedicating hours every week to admin, but that also won’t leave you tearing your hair out at tax time.

How to track expenses for a small business

Before we tell you how to track your expenses, let’s talk about why you should do it.

Put simply, expenses have a large impact on a small business. When the government comes to tax your business, they’re taxing your net income. Your net income is all the revenue you brought in minus your claimable expenses.

By keeping track of your expenses, you can accurately report your net income—and potentially avoid paying more in tax than you should.

1. Set up your business bank account

If you’re set up as a corporation, partnership or LLC, you’re legally required to separate your business and personal finances.

However, even if you’re operating as a sole proprietor, it’s a great idea to open an account just for business expenses. This will allow you to easily track your business expenses, perform reconciliation, and avoid confusion over business and personal purchases.

2. Identify small business expense categories

You may be surprised to find what counts as a small business expense. If you haven’t paid much attention to what you can claim in the past, it’s time to get familiar with the expense rules in your jurisdiction.

While the rules will be different depending on where your business is operating, here’s a list of common expenses for small businesses:

  • Office Supplies – Printer paper, pens, notebooks–any supplies you use in the running of your business.
  • Travel expenses – If you have to travel for work your tickets, mileage, accommodation, and meals may be claimable.
  • Advertising – Any money you spend on advertising your business whether online, in print or elsewhere should be tracked.
  • Meals and entertainment – Taking a prospect out for a coffee? Having a business meeting over dinner? Hang on to these receipts to make a claim.
  • Research and education – Staying on top of your skills is a key part of running a business. Make sure you track receipts for journals or industry magazines and any professional development courses you attend.
  • Home office expenses – If you work from home, you may be able to claim a portion of your rent or mortgage as business expenses, as well as utilities, insurance, etc.
  • Professional services – Any time you hire outside help for your business, make sure you keep track of what you pay so you can claim at tax time. This might include hiring a web designer, a lawyer, and yes, even your accountant.

This is by no means an exhaustive list so make sure to identify what you can claim. Once you know what categories are available to you, you can get organized.

Get the help you need to stay on top of your expenses

From using a small business expense tracking app to hiring a bookkeeper there are many ways to get help with your expenses.

One way to manage your expenses is to stay on top of them as they occur.

That’s where Charli comes in.

Charli is the AI virtual assistant that makes staying on top of your expenses a breeze.

With Charli, every time a receipt or invoice hits your inbox you can easily forward it to Charli. Then, use hashtags to get your expenses organized into categories and ready to file from the get go.

Got paper receipts? Simply drag and drop photos of your receipts to Charli and store them in the same way. Charli’s intelligent system will recognize document types and auto-file them when you’re short of time.

And when tax season finally rolls around, you simply ask Charli to show you all your receipts and tax documents for the year. No more headaches. No weekends spent tearing your home office apart looking for receipts or endless searches on your hard drive looking for documents.

Charli Tip: Use hashtags like #charity or #donation to easily separate any taxable donations. Use #personal for any personal expenses to keep them separate from your business expenses. #tags and notes help keep you organized and ready for an easy breezy tax season.

Need to share your expense reports with an accountant or bookkeeper? Charli also makes it easy to share your content with the right people: so when tax time rolls around, you’ll have no problem sending every last document over to your accountant. Your taxable expenses and donations can be easily categorized in a spreadsheet with one click or simply send your accountant links to the content in your Google Drive.

Make Charli work for your small business.

Get you back to doing the work you love! Try Charli for free.