Top 5 Expense Tracking Problems and How to Fix Them

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 Accurate and organized expense records are important for your business. They can help you cut down costs and boost efficiency. Consistently tracking expenses also allows you to create accurate financial statements that help analyze business performance. Last but not least, tracking expenses provides a clear financial picture to investors, and potentially helping you avail exciting investment opportunities.

However, consistently tracking accurate expenses requires diligence. Using spreadsheets or doing it manually can lead to a host of problems, making the process prone to errors.

Using an accounting software is the ideal way to track expenses and keep your finances well-organized.

Aside from making the process faster, an accounting software builds a financial hub using the transactions you record. This means it creates a digital map of your business. You can navigate and interact as you please. 

Problem: Storing Data Securely

Tracking expenses through excel spreadsheets or manual data entry limits storage and accessibility options. Your data is vulnerable, being stored on external platforms. A malware can prevent you from accessing your expenses and disrupt your business.

Problem: Freedom to Access Data

Data stored manually or on spreadsheets cannot be accessed with complete freedom. Imagine just being informed of an approved invoice while traveling abroad. Keeping a record of business activity would force you to open your laptop. Limited accessibility builds inertia, which can lead to unreported transactions.

Solution: Cloud-Based Storage

Most accounting software use cloud based technology. Cloud-based storage revolutionizes data storage and access. Even if your laptop is destroyed, your data is secure. No calamity in the world can harm your data— unless the access to the internet is severed. 

What’s even better is that you can access your data anywhere, assuming the software you’re using has a mobile app. Your physical presence is irrelevant to running your business. Using your phone, you can track and monitor business activity.

Problem: Time-consuming Manual Data Entry

Manually tracking expenses is a time-consuming process. There is an opportunity cost to this: You could spend the same time strategizing your business growth. Don’t get us wrong. Menial tasks such as tracking expenses or filling out receipts shouldn’t be taken lightly. But choosing to do them manually despite a more efficient option available is irrational.

Solution: Automate Data Entry

The pain of repetitively typing mundane details is eased by a software. To fill an expense, you only have to add details like addresses once for each supplier. With a database of supplier details, creating expenses is simply a matter of adding the expense description items like ‘Quantity’, ‘Price’, and choosing an account.

Problem: Cost of Making Errors

To err is to human. No matter how technologically advanced our civilization becomes, we have to concede our flaws. Making mistakes is hard-wired into our cognitive machinery. Yet, these mistakes are extremely costly when it comes to the business world. Sending out incorrect details impacts our clientele relationships. It ultimately leads to more work in the long-term. 

Solution: Automate Categorization

This is precisely why we can use a clever software to prevent us from ever coming close to making mistakes. Automating categorization lets you categorize everything before you sending out bills and invoices. By dividing the process of creating bills, this helps reduce errors. You don’t have to add long and mundane details like addresses when you are sending out your bills and expenses.

The automation of a software also lets us spend more time on reviewing everything we send out. It’s difficult to take another glance at bills and expenses you spend hours filling data. It is much easier to just get done with them.

Problem: Losing Track of Expenses

Tying all expenses together manually causes mistakes to occur. A business has many moving parts. Different components incur different expenses. You incur different expenses for sales, utilities, and investment. Using spreadsheets or keeping track of them manually is a hectic process. This can often lead to errors and make us lose track of what we record.

Solution: Automate Expense Tracking

A software automatically organizes a list of expenses based on the category it belongs to. There are many benefits to this. One benefit is that it helps you track expenses instantly. You just have to look for the category the expense belongs to. Another benefit is it ensures that you never lose an expense. You can open the list to view all your expenses.

Problem: Organizing Digital and Non-Digital Files

Organizing files on paper and the virtual world separately poses a problem for managing documents. It can muddle your reports and lead to double payment errors.

Solution: Smart Scan using a Software

An advanced accounting software with OCR technology. This allows the software to convert handwritten or printed receipts into digital copies. You can even attach your scanned receipts with their digital equivalent. This makes organization an easy process.  

Conclusion

Handling finances efficiently is a crucial part of running a successful business. Using automation for your financial needs can drastically improve how you run your business.

And help is available out there.

You just need to look in the right place.

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