Business expenses include everything from inventory, payroll, marketing, technology, overhead, and bookkeeping, to travel expenses, consultant fees, office supplies and more. The IRS considers a business expense as any cost that is "ordinary and necessary" to operate the business. An ordinary expense is one that is common in your business, while a necessary expense is one that is helpful to your business. These expenses are usually tax-deductible if the business is operated with the intent of making a profit. Therefore, it's crucial that you properly track your business expenses so that you don't pay Uncle Sam too much at tax time.
QuickBooks Online is # 1 in cloud accounting for small businesses1. It organizes all of your accounting and financial data in one central location so that you can easily manage your business's revenue and expenses. You can send invoices, track payments received, pay bills, track your inventory, and more. QuickBooks makes it easy to know exactly how many dollars are coming into your business (revenue) and how many dollars you spend (expenses) in order to operate the business. When tax time comes, this is the information you will use to file your taxes, and keeping track of your business expenses will go a long way to reducing your tax liabilities.
QuickBooks Online makes it easy to accurately track business expenses using common business expense categories
QuickBooks Online is the easy way to manage your business expenses in one central location. You can record and track your expenses anytime and from anywhere. When tax time comes, your accounting data will be organized and accessible so that you can feel confident that you are using accurate data to complete your tax forms.
It is easy to setup business expense categories in QuickBooks Online to properly track your business expenses. In QuickBooks Online you do this via your Chart of Accounts. A Chart of Accounts is a listing of all of your accounts (Income, Expense, Assets, Liability, and Equity). When you enter expenses, you will assign each dollar going out of your business to an appropriate account. For example, you can setup an expense account called "Furniture and Equipment" and each time you spend money on office chairs, you would assign the expense to this account. QuickBooks comes pre-loaded with a default Chart of Accounts so that you can get started quickly. You can easily make edits, add more accounts, or delete accounts by going to Company > Chart of Accounts.
QuickBooks requires that each business expense is assigned to a corresponding account. Because you already setup your business expense accounts in your Chart of Accounts, it's easy to select the appropriate expense account for each expense. QuickBooks Online provides easy-to-use screens that contain logical fields to record expenses. These screens include a drop-down field that lists your accounts in the Chart of Accounts. To enter an expense, simply complete the fields on the screen and select the appropriate account from the drop-down menu. Your business expenses are categorized and recorded in just a few clicks.
You can also sync QuickBooks to your bank and credit card accounts so that your business expenses are automatically entered for you. QuickBooks will even categorize expenses for you based on data you entered in the past. Just remember to double-check the entries to ensure that QuickBooks categorized your business expenses appropriately. If you need to make a change or edit an item, it's easy to do in just a few clicks. Try QuickBooks Online for free to see how easy it is to track business expenses.