Search
Close this search box.
Blog » Business Tips » 3 Ways you can Keep Track of your Business Expenses as a Freelancer

3 Ways you can Keep Track of your Business Expenses as a Freelancer

Keep Track of your Business Expenses

The term “business expense” is thrown around loosely these days. Flights, hotels, meals, and travel costs are all common business expenses that can be written off come tax day. With hundreds of purchases happening every month, it gets difficult to keep track of all these expenses. If you’re a freelancer, it’s even more difficult to keep track because typically you’re all alone.

If you’re able to stay organized throughout the year in recording your expenses not only will tax time be much less stressful, you’ll also save lots of money from your tax deductions. Here are three easy ways to help you keep track of your business expenses as a freelancer:

1. Know what Actually Qualifies as a Business Expense

Your plane ticket to fly across the country to meet with one of your clients most definitely qualifies as a business expense. The hot date you went on to the 5-star restaurant while you were on your trip does not qualify as a business expense. Most of the time you can use common sense to determine what qualifies and what doesn’t. If you’re still unsure you can always inquire with a tax attorney or CPA.

2. Have a Good Tracking System in Place

Everyone needs to create a system that works for them. It’s often difficult to follow someone else’s procedure verbatim since everyone tends to do things a little differently. Here are a couple ways to keep track, feel free to use them all or a mix of a few.

  • Scan Receipts: If you have a smartphone, there are plenty of free apps that allow you to scan your paper receipts. That way, you can dispose of any loose paper receipts you have and not worry about losing them.
  • Categorize your expenses: Separate your expenses into different categories i.e. transportation, utilities, meals, etc…This will help you stay organized.
  • Use a separate credit card: Make sure you are adamant on making only business related purchases on this card.
  • Stay up to date: Try your best to keep up to date on logging your expenses, this will ensure you don’t get bogged down in receipts.
  • Keep a spending journal: This is a great way to “connect the dots” for your business expenses. Also, if you need to spend cash, you can keep track of that here as well.

3. Consult a Professional

Odds are if you’re a freelancer you don’t have extensive experience working in accounting. When tax time comes around, there’s no problem with consulting a professional to help you with your accounting. This often comes at a high price, but often times the time and money they’ll save you makes it well worth the investment.

Keeping track of expenses is no easy task, but if you stay on top of it, you’ll fly through tax day no problem!

 

About Due’s Editorial Process

We uphold a strict editorial policy that focuses on factual accuracy, relevance, and impartiality. Our content, created by leading finance and industry experts, is reviewed by a team of seasoned editors to ensure compliance with the highest standards in reporting and publishing.

TAGS
Finance and Sales Expert
Renzo Costarella gives financial tips and tricks to help retire early. He is an expert at fintech sales and was former sales person at Due. He currently is an account executive at Brex. Previously, he has worked in sales, product, and growth. He graduated from UC Santa Barbara with a Degree in Business/Managerial Economics.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Categories

Top Trending Posts

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More