A Variety of Approaches to Budget Tracking & Expense Management
by Mike Plotnick, Staples® Contributing Writer
Photographer Brad Feinknopf is a traditionalist, organizing the receipts he collects as he travels for assignments in a Franklin Covey planner. But this owner of Feinknopf, an architectural, interior and corporate photography studio in Columbus, OH, also embraces online resources like mint.com, which he uses to organize and categorize all his client expenses in one place for his external bookkeeper to reconcile.
Feinknopf’s strategy of leveraging more traditional tools and methods works for him, but it may not work for everyone. You need to take your own approach to budget tracking and expense management so this necessary business activity doesn’t turn into a chore.
The following small business owners use a little bit of creativity and resourcefulness to transform budget tracking, expense management and other accounting responsibilities from tedious tasks into palatable — even fun — activities. Consider these ideas for your own business.
Work in the Cloud
Tracking spending has never been one of Laura Benson’s strengths. In fact, the owner and founder of Jeanne Beatrice, an Eden, MN-based wholesaler and retailer of handwoven market baskets, didn’t realize that her largest “expense” — the purchase of baskets from Morocco — should actually be categorized as a “cost of goods sold” instead.
“I was trying really hard, but I knew nothing about bookkeeping,” she says. “I’d show up at the tax guy on April 1, and we would need to unravel a lot before we even got to a point where we could actually file anything.”
Benson’s decision to improve Web site performance led to the development of an automated sales and bookkeeping process. She began using QuickBooks® online, which integrates with the Webgility app on her Web site to streamline and reduce the potential of human error in recording sales transactions.
“Everything is much more automated, and it’s all cloud based, so I can be on my iPad® and access everything while traveling,” she says. “Life is so much easier now.”
Keep It Colorful
“I'm a colored pens and paper gal,” admits Tamara Holland, owner of Bean Up the Nose Art, a retailer of greeting cards, luggage tags and gift items in Alameda, CA. “I get joy and motivation by keeping track of sales numbers, goals, wishes, dreams and ideas in old-fashioned composition books. It’s much more immediate, tangible and fun done this way than sitting in front of a computer screen.”
Use an App
Because Kim Murphey’s time is her currency, the owner of Kim Murphey Virtual Assistant in Rohnert Park, CA, uses timer apps on her smartphone and computer to keep track of how much time she’s spending on individual client engagements.
Once she completes a task, she enters her time on a corresponding client spreadsheet, which organizes and totals the information based on the date, task and billing rate.
“I have certain clients I may only work for for an hour or two a month, and others I work for daily,” she says. “I just change the date on the template and add in what I do for them in 15-minute increments. It’s the easiest way to keep track of everybody.”
Murphey’s largest out-of-pocket expense is reimbursable mileage costs she incurs visiting clients. She keeps track of her mileage in a day planner and also uses Trip Cubby, an iPhone® app that helps tally the expenses she will bill to her clients.
“Because I’m juggling so many different clients at one time, I have to be extremely organized and write everything down, or enter it somewhere as soon as I complete a task,” she says.
Do What Works for Your Business
Tomeka Prescott was just 17 when she began working at Prescott Wireless 1, her mother’s phone and accessories business in Hartsville, SC. Now 30, Prescott follows the same manual processes she first learned more than a decade ago. They include creating daily sales logs, expense logs and inventory logs to monitor store performance.
“We still handwrite everything after each sale,” she says. “But I’m a visual learner, so I take all those logs and create an Excel spreadsheet with graphs and charts so I can see if I’m ordering too much inventory or not enough.”
Prescott plans her purchases on a monthly basis and is disciplined about staying within her inventory budget. “It’s very important not to overstock items,” she says. “If a customer comes in and I’m out of stock, I let them order and prepay for a product. Because we offer quality products at a discounted price, they’re willing to wait a couple of days.”
Although the current process works well, Prescott knows that she should soon start taking advantage of the growing array of online and cloud-based tools available. “I’m all for using resources to help streamline processes,” she says. “As an entrepreneur, you have to do everything you can to free yourself up to focus on what you actually specialize in.”