How to Track Company Expenses (for Small Business)

Let’s be real — tracking company expenses isn’t the most exciting part of running a business. But if you don’t monitor your spending, you could lose profits without realizing it. Whether buying office supplies, paying vendors, or managing payroll, staying on top of expenses is crucial for your business’s success.

The good news? Tracking expenses doesn’t have to be complicated. With the right business software, you can manage your finances and avoid last-minute scrambling during tax season. 

In this guide, we’ll discuss seven ways to track your business expenses as well as some great tools to help you do it.

How to Track Company Expenses: 7 Tips

Here are seven tips for tracking company expenses at small businesses. 

1. Keep business and personal expenses separate.

One of the biggest mistakes business owners make is mixing personal and business expenses. This causes headaches during tax season, making it harder to see how much your business spends.

Instead, your business should have a dedicated bank account and credit card. Use this for all business expenses and company purchases. If you accidentally pay for something business-related with your personal card, reimburse yourself and record it properly.

2. Save and digitize all receipts.

When you pay for company purchases, remember to keep your receipts. Receipts help you track company expenses and determine how much you spend each month. 

Paper receipts can get lost, fade over time, or become an unmanageable mess. Switch to digital receipt tracking to keep everything organized and easy to access.

How to Do It:

• Use apps like Expensify or Shoeboxed to scan and store receipts.
• Email yourself digital receipts and save them in a dedicated folder.
• Use labeled envelopes or a filing system if you must keep paper receipts.

3. Categorize your expenses.

When tracking company expenses, categorizing purchases helps you understand where your money goes. You can see where you’re overspending and where you can invest more in your company. It can also help when looking for small business tax breaks during tax season. 

Most accounting software automatically categorizes transactions. However, if you don’t have these tools, you can use Google Sheets or Excel to organize your expenses. Set up categories such as office supplies, marketing, travel, payroll, and utilities, then add transactions under each one.

Here’s a template to help small businesses categorize and track company expenses:

Download This Template for Free

4. Track expenses in real-time.

Waiting until the end of the month to log expenses can lead to forgotten transactions and inaccurate records. Make it a habit to track expenses as they happen. You won’t overlook payments, and you’ll have a better idea of what you’re spending each month. For example, if you’re on pace to exceed your budget, you can cut spending in areas that actually make a difference and improve your bottom line. 

How to do it:

• Use mobile apps that allow you to record expenses on the go.
• Set up automatic bank feeds with your accounting software.
• Dedicate 10 minutes at the end of each day to review new expenses.

5. Set a budget and monitor spending.

Budgets keep your expenses in check and prevent overspending. Set monthly limits for each expense category and regularly compare actual spending to your budget. If you’re overspending in one area, adjust other categories accordingly. That way, you don’t spend past your budget and can revise business plans for the following month. 

6. Reconcile bank statements monthly.

Reconciling means comparing your bank statements to your expense records to ensure everything matches. This process prevents errors and helps catch fraudulent transactions.

To reconcile bank statements, start by cross-checking your expense tracking system. Ensure expenses match your bank records and investigate any discrepancies immediately. The longer you wait, the harder it is to resolve these issues. 

You should also look for unnecessary recurring charges. This will cut unnecessary spending and allow you to reallocate your budget to other areas of your business.

7. Use expense tracking software.

Manual expense tracking with spreadsheets is time-consuming and prone to mistakes. Expense tracking software automates much of the work, saving time and improving accuracy.

How to Do It:

• Choose a tool that integrates with your bank account.
• Set up automatic transaction imports.
• Regularly review reports to analyze spending patterns.

Company Expense Tracker: 4 Best Tools

Now that you know how to track expenses, let’s look at some tools that simplify the process. Here are four expense-tracking software providers, including free and paid options.

1. QuickBooks

Best For: Businesses that need a full accounting suite with advanced features

QuickBooks is a powerful expense-tracking tool that helps businesses manage everything from payroll to tax deductions. It connects to your payment accounts (bank, credit card, PayPal, etc.) and imports and categorizes your expenses for you. You can also save pictures of receipts in the mobile app, and QuickBooks will match your receipt with an existing transaction. It’s fast, efficient, and ensures accurate bookkeeping over time.

Key Features:

• Automatic expense categorization
• Customizable reports and budgeting tools
• Integration with bank accounts and credit cards

Pricing: $18/month for Simple Start; $33/month for Essentials; $50/month for Plus; $118/month for Advanced

2. FreshBooks

Best For: Freelancers and service-based businesses

FreshBooks combines expense tracking with invoicing, making it ideal for businesses like plumbers, landscapers, contractors, and other home services. 

It’s built with tax season in mind, so plenty of features help you file your taxes at the end of the year. It also bills clients by adding markups that are automatically attached to invoices, and there’s a really handy reporting feature that breaks down expenses across different categories. These features help optimize your pricing, ensuring you’re charging the right amounts and seeing how each payment impacts your bottom line. 

Key Features:

• Automated expense tracking
• Time tracking and invoicing
• Tax deduction reports

Pricing: $6.30/month for Lite; $11/month for Plus; $20/month for Premium

3. Wave

Best for: Small businesses looking for a free, easy-to-use accounting tool

Wave offers 100% free accounting and expense tracking. You can link your bank accounts, categorize transactions, and generate expense reports without paying a dime. 

Its best features include automatic receipt scanning, cloud backup storage, and a powerful mobile app that helps you track expenses on the go. Overall, this is an ideal tool for new business owners tracking their company expenses for the first time.

Key Features:

• Free invoicing and accounting tools
• Automatic bank transaction imports
• Receipt scanning (paid add-on)

Pricing: Free for Starter; $16/month for Pro

4. Expensify

Best for: Businesses with employees who need to track expenses on the go.

Expensify is great for tracking receipts and mileage, making it perfect for businesses with frequent travel expenses. For example, if you fly for work, you can book flights through Expensify, and those purchases are automatically logged into your account. 

You can also sign up for an Expensify credit card, making it easy to separate company and personal transactions. You can even give employees virtual cards to make purchases and track expenses while they’re on the job. This empowers your workforce and improves operations at your business.

Key features:

• Automatic receipt scanning
• Reimbursement processing for employees
• Integration with accounting software

Pricing: Free; $5 per additional employee

Free Company Expense Tracking

If you don’t want to download or sign up for business software, here’s a free Excel template that tracks expenses at your company. Click the link below to automatically copy this template. 

Download This Template for Free

Track Your Expenses Today

Staying on top of your company’s expenses is one of the smartest things you can do as a business owner. These tips and the right tools can simplify your expense tracking, avoid financial surprises, and help you make better business decisions.

Don’t wait until tax season to get organized — start tracking your expenses today. Pick a tool, set up your system, and take control of your business finances now. Your future self (and your accountant) will thank you.