Creating an efficient budget for a business venture and finishing the project within that amount without compromising on profits are two different things. If you do not keep a tab on your expenses, then they can even derail the project.
Let us take a look at why tracking your business expenses matters and how you can do so in an efficient manner with an expense management system.
Table of Contents
Why Expense Tracking Matters?
One of the biggest issues that corporations face is running out of money mid-way through a project because of overspending in the initial phase. This is the major reason why tracking all expenses is important. Utility bill management provides a central location for business owners to track their expenses, and the reliability of automatic bill pay gives them increased peace of mind.
Moreover, it keeps your teams in the loop about the expenses and helps you calculate the profitability after each stage of the project.
If your projects require your employees to travel around, then tracking employee travel expenses becomes quite important. It helps you plan your budget efficiently. Such a practice also helps you give regular updates involving key milestones to the stakeholders.
Benefits Of Tracking Your Expenses
A huge benefit of tracking your business expenses is that you can build a good image in front of your clients and stakeholders, as you will be able give them the reports regarding the expenditure on a regular basis. This improves accountability and transparency. Such a practice improves profitability.
By understanding the project risks and the true cost of the project, you can make changes in the budget and curb down the expenses to make more out of it. Most importantly it helps you avoid sudden financial disasters as you are aware of the financial situation at every stage of the project.
How To Track Your Expenses?
Here are the two ways in which you can track your business expenses:
Traditional method (Excel/Paper)
The traditional method of tracking business expenses and employee expenses uses either an excel balance sheet or a physical ledger book. Even though it is still used around the world, most corporates have realised the obvious flaws in this method. Making each entry is a tiring job as it takes a lot of time, which can lead to human errors.
As a result, discrepancies can crop up in the balance sheet, leading to the inaccurate tallying of the data, which is ultimately a loss for the company.
Automated Method (ExpenseOnDemand)
An automated method is one where you use an expense management system like ExpenseOnDemand to track all the expenses. One of the biggest benefits of this system is that you can go paperless. Employees just need to take a picture of the receipts and upload them in the software without worrying about carrying them around.
One can add comments with the receipt regarding the reason for the expenditure before submitting it. The system collects all the information and creates reports, which you can later download and use as a PDF file when required. This automatic system decreases the possibility of human errors. Thus, giving you an expense report in an accurate and effortless manner.
Final Thoughts
Covid-19 pandemic has changed the game with futurists predicting a new way of leading lives with social distancing at its core. This will slowly eradicate the use of physical receipts as all the transactions will be done digitally.
As a result, having an automated expense management system makes much more sense as it enables your employees to upload details of their purchases through their smartphones.
If you are looking an efficient method to track your business expenses, getting an efficient expense management software like ExpenseOnDemand is the perfect way to go.
Visit www.expenseondemand.com for more details.
