How to Keep Track of Cost Details for your Small Business

You have monthly rent, payroll expenses, the cost of supplies to stock your backroom, not to mention credit card processing fees, advertising fees, and a phone bill. These costs seem constant and sometimes even insurmountable.

Every small business owner goes through this. Some days you may even wonder if it’s worth the anxiety of keeping track of it all. But don’t give up hope – there are a few ways to make this easier on you.

First, find the right software and use it!

There are many, many software options on the market for your small business. Ranging from independent accounting systems like Quickbooks to fully integrated accounting & ERP systems like SAP, your head will likely spin as you sort through the options.

We’ll focus more on this in another piece. But for now, just know that the system you choose and the way you use it factors heavily into how easy it is to track your costs.

Lesson Learned: Take Your Time, Do Your Research, Nail the Implementation

For example, I once worked with a company that used Quickbooks for their chain of retail stores. But as we were preparing to grow to more than 20 retail locations, we had to switch to a more advanced software system...
Finance, Inventory & Logistics Expert

So as we were still setting up the customizable fields for our invoices, purchase orders, and chart of accounts, our new store opened. We never set the fields correctly. We never tested the flow-through of information. And because of this, our accounting and purchasing departments were constantly battling over what number should be where.

Had we taken the time to plan and test, our costs would have been exponentially easier to track. Lesson learned!

Another thing to think about is the way you’d like to access your software. More and more companies are using cloud-based software programs. This means you could access your accounting records from anywhere, from any computer as long as you had the login name and password. The other option is what has been more standard historically, to store the program locally on one computer or a network of computers. There are advantages and disadvantages to each, but I do believe there is a great accessibility available with cloud-based programs and tend to prefer these as we continue moving in the direction of utilizing the internet more and more.

Second, communicate with all employees

To continue what we discussed above, it is extremely important for all persons working in purchasing, sales, and accounting to understand what information should be entered where.

Now this may seem a bit straightforward, but it is essential. It is so easy for your salesperson to skip over fields when entering a sales order because they are instead focusing on relationship building and disregard the importance of a certain metric. Similarly, it’s easy to skip the details on a purchase order because it’s entered in haste.

Make it very clear what is expected of all team members and follow-up when you see exceptions. You must enforce this.

Tip: Make use of mandatory fields

Many software programs allow admin users to make certain fields mandatory. I’ve found this to be helpful in setting up different forms to ensure the correct details and numbers get entered.

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Lastly, remember to stay current

A recurring theme – stay current in entering your bills, invoices, and receipts! If you stay current in entering costs, you will be able to code them correctly. The further and further you get behind, the harder it is to remember details. Why did you spend $30 at Home Depot five months ago? Which project was that? Who knows! But if you enter the receipt details into your expenses the moment you get home from the store, you will have no need to recall five month old information. Keep this as your mantra as you get receipts and you will thank yourself later.

So remember, by using your software correctly, communicating with your employees, using apps to track your expenses, and staying current on your paperwork, you, too, can be a cost tracking whiz.