Did you know that in 2022, there were about 32.7 million small businesses in operation in the US?
If you want to run a successful business, it requires investments of both money and time. But without careful budgeting, your business can fail. That is why every small business owner should keep an accurate budget with personal financial and business expenses.
Today, a budgeting app can make it easy to track business expenses. But why should you track common business expenses? Do you want to learn more?
Read on and find out!
1. Salaries
Small business expenses related to salaries are payroll and taxes, salary raises, bonuses, commissions, and employee benefit expenses. Payroll and taxes as top business expenses consist of Social Security and Medicare, that employers must pay.
Salary can be in the form of raises that you give to employees to reward them for their performance and loyalty to the company. You can compare employee salaries against industry standards if you track raises.
Bonuses and commissions are variable expenses that you should track to make sure you don’t go beyond your budget. Also, track the benefit expenses such as health insurance, retirement plans, and other perks. This is to ensure that the business is competitive with other employers.
With the right financial tracking systems, businesses can have a good handle on their salary-related expenses. There are tracking and payroll software like nav.com that you can use to ensure things are done properly.
2. Utilities
Examples of expenses when it comes to business utilities include items such as electricity, fuel, water, communications, and more. You need to track all these expenses in detail to ensure you manage the costs wisely.
Business owners need to be aware that utility costs will vary from month to month, depending on usage volume. This can lead to unexpected expenses. These expenses can impact a business’s bottom line if monthly expenses for small businesses are not tracked.
3. Advertising Costs
Advertising costs are essential expenses to track when running a business. When determining an advertising strategy, the total cost should be taken into consideration. This includes research and development expenditures, as well as the costs of media placement, as well as any additional marketing materials.
When tracking expenses, make sure to include any promotional items, discounts, and giveaways that may have been used as part of your advertising campaign.
4. Travel Expenses
Travel expenses include costs associated with airline tickets, expenses related to accommodation and meals while on a business trip, and transportation while at the destination. Companies should ensure they keep track of all travel expenses to avoid any potential disputes.
Tracking of expenses could include maintaining receipts of all payments and purchases, and employee mileage logs, including the purpose of the trip, date, and total miles. Whenever possible, it is best to use corporate cards for all expenses to give greater visibility and to make it easier to reconcile accounts and track expenses.
Companies should also create travel expense policies and guidelines to give clear direction and help ensure employees don’t spend too extravagantly.
Keep Track of Your Common Business Expenses
It is important to keep track of common business expenses and ensure you are documenting them properly. By doing so, you can maintain strong financial records and keep better track of your expenses. This includes salaries, utilities, advertising costs, and travel expenses.
Consider using this guide that can help you stay organized and create a plan for long-term success.
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