We are entering the heart of tax season. April 15 is a mere 6 weeks away.
If you’re like me, you don’t dread meeting with your accountant, you dread preparing. For me, preparing to meet with my accountant is more painful than going to the dentist. Collecting documents, finding receipts and remembering business expenses from the past year is a struggle, if not downright impossible. I decided this year I would try to improve the process by using an expense tracking tool.
I had read about a tool called Expensify, and after hearing a few other people mention it, I decided it was time to give it a try. Being I had no current system for tracking expenses, it was worth trying something…, anything!
Well, I’ve been working with the tool the last month and have been pleased with the results.
Expensify does just what it sounds like. It helps you track and categorize expenses. You signup for an account on the web, and then you use the web interface to enter expenses, organize expenses, and even fill-out expense reports for company reimbursements.
More importantly, Expensify provides a mobile app that you download to your iPhone, Android or BlackBerry device. The mobile piece is what really makes Expensify shine. You use the mobile app to enter, categorize and make notes about expenses using your phone right as they happen. You can also use your phone to take pictures of the receipts that you attach to your expenses for upload to your account. According to Expensify, their eReceipts have been designed to meet and exceed IRS regulations for record keeping, meaning they will be accepted by the IRS if you are audited (see the FAQ on the Expensify website for more details).
For example, let’s say I go out to lunch with a client at Maria’s Italian Kitchen. I pay for the lunch and want to record the expense for tax purposes. I simply follow these steps:
Step 1: Open up the Expensify app on my phone and click “Add Expense”
Step 2: Enter the date of the transaction, the amount, merchant, and a comment – like who the lunch was with and what we talked about. I take a picture of the receipt, and then click “Submit”.
Step 3: When I get home, or at the end of the week, I log-in to my Expensify account, add additional information to the expense, and then categorize it.
Now at the end of the year, I have all my expenses categorized by type, the receipts are all attached, and I can create a list to print out for my accountant.
In addition to basic expense tracking, here are some other cool features of Expensify:
- Upload Receipts: Tired of scanning receipts? You can take pictures of receipts with the app on your phone, upload them to your account, and then associate them with the proper expense.
- Attach email receipts: If you get a receipt through email, you can forward it to your Expensify account, create an entry for it, and then link the emailed receipt to the expense.
- Track mileage expenses: You can enter mileage expenses into Expensify as well. It has a cool mapping feature that lets you put in destination points and the mileage is calculated automatically – very useful for keeping track of mileage during those busy Saturday property showings with clients.
- Chart and graph expenses: Track expenses by type, vendor, over time and more.
- Import expenses from a credit card: If you use a credit card for your business expenses, you can automatically import the entries into Expensify.
- Free for personal use: Its best feature – it’s FREE! There is no charge to use the tool to track personal expenses.
I’m sure there’s more, as I’m still learning the tool. If anyone has any expert tips, please leave them in the comments!