Gone are the days of pen and paper ledgers, rudimentary spreadsheets, and software that fails to integrate with your bank and business processes. In the same way that you can now order a car ride in a few taps or deposit checks with your phone’s camera, technology has simplified business expense tracking.
If you’re a small business owner or entrepreneur wondering how you can better track day-to-day expenses, the step-by-step guide below will make the expense process a breeze while saving time and money.
And yes, the entire expense process can be completed in a mobile app.
Before digging into the how, it’s essential to understand the why. If you have a business, you have business expenses. Tracking these expenses helps small businesses:
Small business expenses vary widely but typically fall into categories such as travel expenses, advertising and marketing expenses, and rent or mortgage payments.
Many small business owners and entrepreneurs are waking up to the fact that they can—and need to—upgrade how they control, manage, and track expenses. Technology can solve many expense-related pain points that small businesses see. These solutions can:
Streamline and automate expense tasks
Adopting accounting software will simplify every aspect of the expense process and minimize the financial risks associated with traditional expense management.
Small businesses often blur the line between professional and personal expenses. Opening a dedicated business credit card helps clearly define business-related expenses and is the logical first step in establishing an accounting system for your small business.
If you already have a separate bank account for your business income, you may wonder if a credit card is necessary. Unlike business bank accounts, credit cards have some surprising benefits, including helping your small business do the following:
Not all credit cards are created equal. Small business credit cards and corporate cards are two popular choices, and it’s worth researching the differences between each type of credit card to decide which avenue fits your small business’s long-term needs and goals.
Now that your small business has a dedicated credit card, all employees need to use it for every transaction. Using cash hurts small businesses because:
Alternatively, when everyone in your company uses digital transactions:
Startups and small businesses often fall victim to using cash to avoid fees or accruing interest, which companies can easily avoid by selecting a credit card carefully and then using it responsibly.
Now that your small business has its finances sorted, it’s time to find the right accounting software. The good news is that technology tools for managing finances that were once only available to big businesses are now accessible and affordable for small businesses, too.
Although there are many rudimentary accounting apps to choose from, it’s wise to look for software that can control, manage, and track expenses. This type of technology is known as expense management software.
When searching for expense management software, it should—at a minimum—have the following functionalities:
Warning: Some basic business expense tracker apps only scan paper receipts and do not capture transaction details by line item (a process known as auto-itemization). Without this breakdown of expenses within an invoice/receipt, your company won’t have the details needed for business taxes and accounting purposes.
As companies scale, the technology that powers how they track business expenses should scale, too. If you have employees—or plan to have them in the future—look for an expense management solution that:
Congratulations! If your small business has followed steps 1-3, you’ve successfully created a single source of truth for all business spend. Now that you keep up-to-the-minute financial records, it’s time to take a deep dive into the data.
What story are the numbers telling you? You should be able to slice and dice the data to:
Some expense management software also allows you to see how your small business compares to other companies in your industry of a similar size.
With data and dashboards at your fingertips, you can make financial and policy decisions that best serve your company. Not only is your business saving time and money, it’s also gaining insights that would be impossible to glean from a traditional pen-and-paper ledger or a makeshift spreadsheet.
Interested in a solution that does all of the above? Navan Expense is a corporate credit card with a built-in expense tracking app that automates every step of the expense process. It gives companies one easy place to control, manage, and track spending—from payment to reconciliation.
A few benefits for small businesses include:
Don’t just take our word for it. Hear from a few small business owners on why they think Navan is the best expense solution for their companies:
Karen Brennan, director of sales and marketing, Campus Cooks:
“[Navan is] so easy to use. In my line of work, time is my most valuable resource; by eliminating the monthly expense report process, I gain hours back each month.”
Shellie Roanhaus, executive assistant to the CEO, Premier Talent Partners:
“For us, as a smaller business, Navan is absolutely worth the investment. I can’t imagine going back to what we did before.”
Ashley Hagaman, accounting manager, EMJ:
“It’s just so easy. It’s so much better than anything else we’ve ever looked into. I love that everything is in one place for accounting. The customer service is fantastic. It’s been a great experience.”
Ready to start using Navan today? Get up and running in 5 minutes.