Why is it necessary to track your expenses?
As a person who runs a business, you incur expenses all the time and keeping track of them is vital to maintaining a healthy business plan. Whether it’s discussing a deal with your client over a meal or driving over to your vendor’s to look at samples, you never know when an expense might crop up.
Recording and tracking these expenses helps you in identifying where your money is going, and ensures that your financial priorities are being met and helps you decide where to cut down costs in order to maximise profits.
The key to painless expense tracking is to not leave it too late till it turns into a scrappy receipt-strewn mess at the end of the month. The important thing to remember is that no expense is too small and insignificant to record, they will all add up at the end of the month.
Here’s a step-by-step guide on how you can start using Zoho Invoice to track your expenses.
Tracking Expenses in Zoho Invoice
The Expenses module in Zoho Invoice lets you record, view, track and modify all your business expenses in one place. If you’re just getting started, here’s a step-by-step guide that will help your organise your expenses easily
- Categorize Expenses - Write down every type of expense you’re likely to incur, and sort them into groups. Based on this information, create new categories in Zoho Invoice for your expenses. The next time you create an expense, you know exactly where to file it.
- Set up recurring profiles - Some of your expenses are incurred repeatedly, like your monthly rent. You can check them off your to-do list forever by setting up automated tracking in Zoho Invoice to keep tabs on them.
- Track and Reimburse - Whether it’s purchasing a couple of laptops for the office or just grabbing lunch with your colleagues, miscellaneous business expenses are the hardest to keep track of. The key phrase to remember here is - right there, right then. Record an expense in Zoho Invoice as and when you incur it, even instantly uploading receipts if any. If the expense is one that you’re getting reimbursed for, you can mark it billable and send it across for reimbursement.
- View and analyse reports - Zoho Invoice takes the minimal data you enter and presents it in the form of expense reports that illustrate your spending patterns and help you make quick decisions.
You can divide the expenses you record in Zoho Invoice into various categories, making expense tracking and sorting of expense reports very straightforward. Each category is designed to accommodate expenses of a certain nature or type, and you can even create new ones to suit your requirements. A few examples are,
- Advertising expense
- Credit card charges
- Meals and entertainment.
When you run a small or medium business where miscellaneous expenses keep cropping up, it’s always useful to have a detailed record of where your money goes. This helps you assess the areas where you need to cut down on spending, or identify new avenues that with a little extra investment could further your business. Categorizing your expenses presents these bits of valuable information to you as reports and helps you make quick decisions.
Zoho Invoice lists a default set of expense categories that cover a wide range of expenses. You can modify these categories or even create new ones easily.
- Create - Create a new expense category by clicking the Gear icon - Expense Category. Click on New Category. Provide a category name, description and save it.
- Edit - You can edit the category name and description anytime by clicking the Gear icon - Expense Category and simply clicking on the particular category you want to edit. Make the required changes and hit save.
- Delete - An expense category can be deleted anytime by hovering over it and clicking on the trash can symbol that is displayed alongside
- Mark active/ inactive - An expense category can be disabled temporarily by hovering over it and clicking mark as inactive. This action can be reverted anytime by selecting the mark as active option.