Tracking your business spending is critical to your success. It helps you stay out of debt, it makes it easier to make financial decisions, it makes you more confident in your business and your finances, it helps save time during tax season and it is just a good and solid business practice.

The question is…how do you track your expenses? What strategies make the most sense and how do you make sure you don’t miss recording an expense? How do you stay on track? If you feel you need help in this area, here are five simple tips to help you out!

#1: Get organized! This is the first and most important step. If your receipts are all over your office, and your home, and you use ten different methods of paying for your expenses, it’s going to be extremely difficult to get and stay on track.

#2: Develop a system of paying for your expenses. Having all of your expenses coming out of one business account is the best way to stay on top of your spending. If you use a credit card, a debit card, a checkbook and your ATM card, you have four accounts you need to track. However if you only use your debit card then you only have one bank record to look at.

#3: Develop a system of recording expenses. The cluttered desk covered with piles of receipts, invoices and statements may be funny, and typical, but it isn’t productive. Cleaning up this kind of mess can take a full day and pull you away from work you could be doing to make money. The quick and easy way to stay on track is to have a filing system. One file for this month’s or week’s paperwork, one file for receipts after you’ve recorded them, one file for invoices and one file for each account you have that renders a regular statement – your bank for example. Every Friday afternoon or Wednesday morning, or whenever makes the most sense, take your folder with your week’s worth of paperwork and record your expenses, record your income, and file it all away. It’ll take you ten minutes – much better than a full day of lost time.

#4: If you don’t have one already, get a budget or a spending plan in place – and use it! Budget your business costs, from your telephone line to your marketing plan, and set money aside to save. Yes, savings is important in business too. You will want to have funding available when those business opportunities arise.

#5: Evaluate your budget regularly. A budget is a tool just like your website statistics. It is there to give you information so you can make informed decisions about your business. Simply tracking the information isn’t enough. You need to review it at least quarterly, preferably monthly, to see if you’re spending is on track. There will be times when you need to adjust your budget – that’s fine and to be expected.

Tracking your spending doesn’t have to be difficult, and it is important. A simple, organized system is a great way to begin and is often all you’ll need.