Are you capturing all of your business expenses? How many times do you pay cash for something and forget to submit your receipt to your employer or business for reimbursement?
There is an easy solution….use a credit/debit card!
How do you choose which is best to use, credit or debit? First rule of thumb, NEVER mix personal and business transactions.
Use a Debit Card
If you have access, or your employer grants you access, to a business checking account. So the funds paying the business expense would be swept directly from the business bank account that the expenses are being incurred for.
Use a Credit Card
If a debit card is not available to you, or if you would prefer to pay your expenses on a monthly or extended credit period (maximizing cash flow). Putting a process around how you utilize a credit/debit card to monitor your business expenses is the real key. Follow these simple tips to optimize recouping your business expenses:
- Apply for a totally separate card for business purposes only.
- Save all of your paper receipts in one place.
- Maintain a specific calendar or journal with your business appointments and travel. (Included company, contact, address, date, time, mileage log and purpose). If these details are kept electronically I highly recommend that you print a copy each month.
- Use the monthly card statement as your reminder to file reimbursements to your employer or if you are self-employed, match your paper receipts with the card statement, attach your printed calendar/journal for the same time period and pay the statement with a business check. (Enter summary charges manually or import transactions directly from card provider into your accounting software.)
Capturing details month by month ensures that you are reimbursed in full for any business expense you may have incurred, as well as maintains the IRS required business expense documentation for tax purposes.