Tracking Your Business Expenses as a Young Entrepreneur

Keeping track of your expenses might not sound exciting, but it’s important if you’re running a business as a young entrepreneur. Knowing exactly where your money’s going and how much profit you’re making can help you avoid unnecessary debt. It’s also good practice for when your business grows. In this article, we’ll break down the basics of tracking your expenses in a way that’s simple and easy to stick with, even if you’re just getting started.

Understand Your Expenses

The first step to tracking your business expenses is figuring out what you’re actually spending money on. Start by breaking things down into simple categories:

• Office supplies: Think your laptop, phone, pens, or agendas.
• Inventory: Anything you need to stock if you’re running a physical business.
• Online tools or subscriptions: Like your e-commerce platform or graphic design apps.
• Miscellaneous items: Postage or shipping costs.

Jot everything down in a notebook or a notes app for now. You’ll move it to an online tracker later to keep things organized.

Use Free Online Tools

When you’re just starting your business, you don’t need anything fancy to keep track of your expenses. Spreadsheets are easy to use, totally free, and a great way to organize your business costs. You can use tools like Google Sheets or Microsoft Excel to set up a system that works for you. Not sure how? Just search for beginner tutorials on YouTube—they’ll guide you through everything.

To get started, create simple columns like date, description, amount, and category to track every expense. Anytime you spend money—whether it’s for online ads, supplies, or tools—just add it to your tracker. It’s an easy habit that’ll keep you organized and in control as your business grows.

Open a Business Bank Account

Opening a business bank account is a great way to keep your personal and business finances separate. You can head to your local bank with a parent or guardian and set up an account just for your business. A lot of banks even offer no-fee accounts for students or young entrepreneurs. For example, if you’re running a lawn mowing service, you can deposit your payments into the account and use it to pay for gas or equipment. This keeps all your business costs in one place.

Save All Receipts and Invoices

Not only does keeping track of your receipts and invoices help you stay organized, it’s also crucial for tax prep. Depending on where you live, some business expenses might even qualify for tax deductions, which can save you money. Here are some easy ways to save your receipts:

• Go old-school: Keep a physical folder to store all your paper receipts in one place.
• Go digital: Use apps like Google Drive to scan and save receipts online.
• Combine everything: Log your expenses and invoices in your spreadsheet tracker and keep the physical copies as a backup.

Set a weekly reminder to organize your receipts. That way, even if you have a crazy week, you won’t lose track of anything or miss an important expense.

Regularly Review and Adjust Your Budget

Tracking your expenses helps you figure out how to adjust your budget based on what you’re earning. In fact, 29% of businesses close their doors because they run out of cash—something that could be avoided if you have a clear understanding of your spending and income. 

For example, if you’re spending too much on fancy packaging, you could switch to something more affordable and save some cash. It’s about spotting areas where you can cut back without hurting your business.

Set aside a day each month to review your expenses and see how your spending compares to the past few weeks or months. Take a look at what you’ve earned and think about whether you should cut back in some areas or invest a little more in something worthwhile—like upgrading to a premium tool or service you’ve been eyeing. Regular check-ins like this make it simple to stay on top of your finances and make smart decisions.

Master Your Finances, Master Your Business

Tracking your expenses makes life so much easier—it keeps things organized and takes the stress out of tax season or reviewing your finances at the end of the month. Start now by creating a simple spreadsheet or saving your first receipt. The more you practice tracking your expenses, the better you’ll get at managing your money, which will help you grow and run a successful business down the road.

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