Small Business Expense Tracking Tips

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The ultimate tips and tricks to optimize your small business expense tracking. Keep reading.

Running a small business is already a lot of work.
Why not make less work for yourself?
With these small business expense tracking tips running your business is that much easier.

Expense tracking for small business seems daunting at first. Maybe it’s unfamiliar; you don’t know what is a business expense and what isn’t. Or, perhaps expense tracking is not as exciting to you as working with clients, doing marketing, or doing business development. However, it’s definitely something you want to get good at to maximize your small business tax deductions. 

That’s why, in this article, we made sure to compile a definitive list of business expense tracking tips that saves you time and that meets IRS recordkeeping requirements. 

1. Use an Expense Report Template

The fastest way to save time is to stay organized. And to stay organized doing expenses you need a small business expense tracking template.

What are the advantages of a small business expense tracking template?

In addition to saving you time by keeping your small business expenses organized, it automates a lot of the work for you. For example, calculations are done for you. In addition, expense totals based on expense type and category are also summed in a proper small business expense tracking template. 

Another advantage of a small business expense tracking template is that a good one contains all the data inputs required to create an IRS compliant expense report.

2. Keep Receipts

This is particularly important when you use physical cash to make business expense purchases. However, it is also often necessary to keep paper receipts for business expense tracking when you use your credit card. 

There are two sides to this coin when it comes to keeping paper receipts for expenses. 

  1. for taxes
  2. for bookkeeping

It is true the IRS requires a record of business expenses, but not always a paper receipt. There’s one circumstance when it’s required to keep paper receipts for taxes.

More importantly, when running a business, you want to understand where you are spending money not just for tax purposes, but for accounting and financial health management.

For example, you want to be able to drill down into your financial statements to see where you’re spending too much. 

By keeping receipts you have the expense details you need for your record at your fingertips.

The best way to keep receipts is with a receipt keeper app. A receipt keeper app allows you to take pictures of paper receipts and store them as images, along with all their important expense data. That way you meet IRS record-keeping requirements (or even your business accounting requirements) without the risk of losing a receipt, misplacing it, the receipt getting damaged, faded, etc. All of which are very common with the old-school shoebox method of receipt keeping.

So toss those receipts, and use a receipt keeper app.

3. Know What is a Business Expense

Do you ever ask yourself, what can I write off as a business expense?

It’s an important question. Because before you can track tax-deductible expenses you need to know which ones are actually deductible. So first learn what is a business expense and become aware of all tax-deductible business expenses.

According to the IRS, ‘business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit’. Though, that sounds a bit technical.

In any event, some business expenses are 100% tax-deductible, while others are only partially tax-deductible. It’s important to make sure you are educated on what is a business expense write-off.

For details from the source, check out the IRS Publication 535. Publication 535 goes over each business expense and what is and what is not tax-deductible.

4. Use an Expense Tracking App for Small Business

An expense tracking app for small business makes things a lot easier. Expense tracking apps for small business automate a lot of the hassle. For example, they will calculate and sum your expenses, scan receipts with OCR technology, or automatically track your miles as you drive with a GPS tracker. In addition, many integrate with major banks and credit card companies to pull in your purchases for you to directly assign them as a business expense without ever having to manually enter any data.

If you’re serious about your small business accounting then you need an expense tracking app for small business.

5. Meet IRS Expense Recordkeeping Requirements

You’re probably asking yourself, how do I write off business expenses?
One of the main reasons to track expenses is to write off small business expenses. Small business tax write-write offs reduce a small business’s overall amount of taxes paid to the IRS. This increases small business net income.

However, it’s important to keep proper expense records to write off small business expenses. That way, in the event of an IRS audit, you have all the required expense documentation to avoid an error. This is why it is important to understand the IRS recordkeeping requirements. For complete details of the IRS recordkeeping requirements read this article (with links to IRS resources): IRS Rules for Recording Business Expenses

6. Record Expenses ASAP

This tip is the last tip, but it’s short and sweet.
Record your small business expenses as soon as possible. This makes sure you don’t forget or misplace the details of a small business expense.


Small business expense tracking is not much of a hassle when you are equipped with the right tips to get the job done with ease. Be sure to maximize your small business tax deductions to maximize your net earnings. Also, don’t hesitate to take advantage of a small business expense tracker app like Falcon Expenses, as this will definitely automate a lot of the work for you.

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