Why Is It Important to Track and Control Your Expenses?
Properly managing your expenses today is one step startups can take to protect their future.
October 13, 2021
The way a company manages and spends their money can either make or break them. Losing grip of your finances can place roadblocks in your startup’s journey to growth and can cause many complications down the line. Staying on top of your expenses and monitoring them annually, monthly and even weekly is a great way to keep your finances in check and hold your teams accountable, setting you up for a future of success.
Your future depends on it 💰
Tracking your expenses gives you the insights to be strategic and innovative, while powering you to grow at the same time. It goes beyond recordkeeping and provides visibility and context to where your money is going, who’s spending it and why. With this, companies can get into the driver’s seat of their corporate spending, allowing them to make better decisions that align with their budget and overall objectives.
When companies fail to track their expenses, it can lead to overspending and ultimately hinder expansion and profitability – whether it’s onboarding new talent or investing in innovative technology and infrastructure. For startups in particular, this is especially critical if you’re looking to enter your next stage of growth.
Rule out spending issues and expense fraud 🕵🏻♂️
Failing to track and monitor where your money is going is like being blindfolded every time you make a business decision. 🙈 Not only that, it can also muddy the waters when it comes to identifying spending issues or inflated expense claims. Without the proper visibility into your finances, you run the risk of losing valuable dollars and ultimately impacting your bottom line. Having a full view of your daily, monthly and annual expenses will quickly reveal any inconsistencies and red flags and allow you to immediately resolve them before it’s too late.
Be prepared for tax season 🗂
Tax season is stressful enough for finance teams and managers – and when financials are all over the place, the office can feel like a total warzone. 💣 Maintaining a consistent and up-to-date record of expenses will eliminate the need for team members to rummage through files and drawers to locate receipts at the very last minute. Not to mention, it drives considerable efficiencies so that your finance team is not bogged down and that tax-saving opportunities and deductibles are not overlooked. Some key tax deductibles to look out for include:
- Business meals 🍕
- Phone & Internet expenses 🤳🏾
- Software expenses 💻
- Travel and lodging expenses 🚗
- Office supplies 📒
- Home office expenses 🏠
Being organized and tracking your expenses can save your company more money and put it toward other areas of the business. 💸 And let’s not forget, the Canada Revenue Agency requires you to keep record of all your transactions. So, if you ever find yourself in the middle of an audit, you’ll be glad you read this. 😉
Stay accountable to your budget ✅
Building a budget is the easy part, but sticking to it requires the most muscle. 💪 Tracking your company’s expenses is one of the most critical ways to ensure your spending habits are aligned with your business goals and budget. When your finances are organized, your finance team can easily identify where cuts need to be made and what areas you can invest in. For example, let’s say you want to increase your marketing budget for an upcoming product launch. Having a clear picture of financials across the company empowers you to make informed spending decisions, without spreading yourself too thin. 😅
Revenue minus expenses equals PROFITABILITY. 💵
When you track your expenses, it becomes much easier to calculate your company’s profitability – and do it accurately! Funding is a key component for the success of any startup. When you have a clean book of financials, you’ll be able to effectively attract investors and increase your chances of getting funding. With greater insight into your finances, you’ll be able to show investors what growth looks like and how you plan to get there. 👏🏼
Achieve all of the above with Float. 🤩
Float gives businesses the power to set clear parameters for their financial processes with our automated spend software and corporate cards. 🔋 We make it possible for startups and their employees to track spending in real time without all of the nitty-gritty manual work. Float provides an instant overview of individual, department, and category spend so you can scale with insight, while allowing to set spending limits to easily stay on budget. By automating this entire management process, we bring greater efficiency, accuracy and oversight to your financial operations. With our corporate cards, we also bring your employees into the equation, holding them accountable to submit their receipts on time, stay on budget and uphold the company’s policies.
Float makes it easier to organize and manage your financials with the tools to level up and grow at high speed. 🏎💨 To learn more about how Float can help you, contact us today!
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