"Ever come back from a business trip with a purse or wallet full of receipts and notes scribbled on napkins and no clear recollection of which expense was for what? No more forgetting your cash expenses, no more half-day expense entry sessions." extracts from a website reviewing expense tracking services.
You want to avoid tax hassles. You want to stay within budget. However, keeping on top of expenses seems to be a struggle. There are only so many hours in a day. You know that falling behind on recording your expenses in the books will only make matters worse. You have set a specific time aside to deal primarily with record keeping. You know that this will make tax time easier and quicker for you. You know that this necessary function of a business is so crucial to the success of your business that you cannot put it off.
But when you do, sit down and start entering expenses and pulling the receipts together, you find that it takes longer than expected. Much longer. This time can be more usefully spent on things that matter such as meeting with prospects and making deals. Is there any way to make it shorter?
Yes, there is. Capturing expense data while on the road is by far the most effective way to stay on top of business expense reports. There are three major reasons why this will save you time:
- You are capturing expenses closer to the point of transaction before you misplace the receipts and, more importantly, before other crises come in and make whatever happened yesterday feel as if it was in a previous life and on another planet.
- While you are on the road, you are often waiting. Waiting for a flight, waiting for your prospect to show up for lunch or waiting between meetings. This is a great way to get stuff done and fill those waiting times with tasks that will actually save you more time later.
- Many phones come with a camera these days. If you have one of those, you can take a snap of the receipt as well. If you misplace the receipt, which seems to happen more often than you would like when you are on the road, you have a digital copy as backup. However, check with your accountant or tax consultant whether you are required by IRS to keep your paper receipts as well.
While this is true of mobile employees in general, it is a lot more applicable to small businesses for the following reasons:
- As a small business owner, partner, or employee, you tend to wear many hats and try to get a lot of things done while you are on the move.
- Smaller businesses tend to buy as needed a broader range of items than larger ones.
- Too many small business owners tend to mix and mingle their personal and professional expenses. Even if you are a sole proprietor, you should keep your business and personal expenses separate. This will help come tax time when you need to separate your business expenses. You can do this a lot more effectively if you capture expenses closer to the scene of the action.
Oh, by the way, this approach may also satisfy the IRS requirement to maintain "contemporaneous records" of business travel, entertainment, and other expenses. How much more "contemporaneous" can you get? Check and confirm with your accountant or tax consultant.
In this chapter, we shall:
- Learn how to use your mobile phone to capture expenses close to the scene of the action.
- See how to migrate data from another accounting software to GnuCash.
- Export data from GnuCash for a variety of reasons.
So let's take a closer look at the ways in which this can be done.
Smartphones may look small, but they have a lot more power these days than PCs of yesteryear. More importantly, that is what you are carrying while on the road. You can use it to capture expense data closer to the scene of the action and later sync or upload to your PC when you get back to the office. The trick is to save it in a format that doesn't require you to jump through hoops to get that data into your bookkeeping software. We will see how in this tutorial.