Organizing your small business can be very efficient. When you know exactly where to find certain resources or documents, everything will run far more smoothly.

It doesn’t have to be stressful or difficult, either. One of the most efficient ways is to create a list of expenses to help provide insight into how much money your company allocates each month.

Let’s explore how to create a small business expenses list.

1. Always Keep Your Receipts and Invoices

This is the only way to prove that you made certain purchases for your business. It’s recommended to keep things organized in a folder or binder. Digital storage is also something that you should consider.

This will make it easier to put together an accurate expenses list when tax season comes around. You can check out this resource to learn more about other tips.

2. Decide on How Detailed You Want Your Expenses List to Be

If you choose to go super in-depth, make sure that you can remember what certain purchases were for (such as a new business phone system). It may also be helpful to take pictures of receipts and invoices when possible — this way, you can save as much time as possible when archiving information.

If you wish to use an easier method, it can be helpful to keep a small note document on your phone that can remind you of what certain expenses were.

3. Keep Track of Bills and Invoices That Are Not Receipts

These can include rent memos, licenses, client invoices (if they do not come with a receipt), and anything else that could prove useful. Otherwise, you might not have an accurate understanding of your business finances.

This could lead to you encountering a large number of difficulties in the future. It could also put you at risk of struggling to accommodate an audit by the IRS.

4. Keep Track of Where Your Money Is Going

This is achieved by putting together a spreadsheet with columns for the type of expense, date, item purchased, cost of purchase/service/rent, etc. This method is very straightforward and is highly effective in helping you stay organized.

So, don’t overlook it in the future.

5. Set up a Schedule

It’s essential to set a schedule for when you will update your spreadsheet each month/week/day/year!

This will help you always stay up-to-date with your small business expenses list so that you are able to get the most accurate idea of how much money is being taken out of your pocket at the end of a certain time period.

Creating a Small Business Expenses List Might Seem Difficult

For those who are just learning how to start a small business, it might even seem overwhelming. The good news is that it’s not nearly as complicated as it might seem at first.

A small business expenses list will help ensure you manage your finances appropriately. You can check out the rest of our blog for a similar small business guide and other useful tips.