# Free Small Business Expense Tracking Spreadsheet Table of Contents ## Is Xendoo right for you? We support thousands of small businesses with their financial needs to help set them up for success. Small business expense tracking can be tedious, but it’s one that all companies–from “mom and pop” shops to international enterprises–must do. Fortunately, [business expense tracking apps](https://xendoo.com/blog/tracking-business-expenses/) make the job easier. An app is ideal if you have a business with many employees, sales, and tax considerations. For some small businesses, however, paying a subscription fee for an expense tracker may not be feasible in the beginning. In this case, they can use a free business expense tracker or template. While expense tracking will remain manual, it will keep their finances organized in one place. We’re sharing a free business expense tracking spreadsheet that you can use. You can [jump to the spreadsheet here](https://xendoo.com/blog/small-business-expense-tracking-spreadsheet/#small-business-expense-tracking-template) and scroll further to learn how small businesses can keep track of expenses for free or at little cost. ## Why do you need to track small business expenses? As you may know, you’re required to file taxes each year. Come tax time, no one wants to sift through old receipts to account for each expense. Once you start expense tracking regularly, you can eliminate such hassles. Moreover, up-to-date records ensure that you file tax returns accurately. Therefore, should the IRS audit your company, you won’t have anything to worry about. Besides saving you time, you’ll also want to track expenses to take advantage of tax deductions and better financial health. ### Tax Deductions Everyone has to deal with taxes every year–companies and individuals. You may be eligible for tax deductions for certain expenses or activities. If you qualify for a deduction, you can lower the tax amount you owe and use the savings to grow the business. While it may surprise you, many small business expenses qualify for tax deductions. However, only a small proportion of small business owners benefit from them. This is primarily due to inadequate expense tracking practices and not knowing how much you can save. With reliable accounting software, you’ll have expense reports. These will give you a complete picture of your spending and tax deductions. If you’re unsure what counts as a deduction, you can review our list of [over 20 tax deductions for small businesses](https://xendoo.com/blog/small-business-tax-deductions/). ### Financial health Data from the Bureau of Labor Statistics (BLS) shows that [20% of small businesses fail within the first year.](https://www.entrepreneur.com/article/361350#:~:text=According%20to%20data%20from%20the,about%20half%20will%20have%20failed.) This figure rises to 50% by the fifth year. But there’s a silver lining. Most of these businesses do not fail because there’s no market. Surprisingly, some companies make a lot of money and still fail. Some of the reasons for this include: - Financial mismanagement - Cash flow issues - Unsustainable growth - Poor planning As you can see, all those factors are related to finances. By ironing up your expense tracking processes, you can significantly increase the chances of success for your business. You’ll be able to quickly spot unnecessary, unusual, and fraudulent activity that may bring your business down. This way, you can limit business expenses to necessary expenses and prevent costs from going overboard. ## What are common business expenses? Businesses in varying industries have different expense profiles. Even still, there are expenses that almost all businesses have. In the expense tracking spreadsheet, you’ll find areas to record each of these expenses, including: - **Advertising and marketing** – Costs associated with hiring a marketing agency or a consultant. - **Auto expenses** – If you use your car for business, you can expense repairs and mileage. - **Bank charges** – Fees and costs for a business bank account and credit cards. - **Commissions** – They will be recorded here if you pay out sales commissions. - **Contract labor** – This is for businesses that hire freelancers or contract employees. - **Interest** – If you have a business loan, its interest is considered an expense. - **Legal & professional** – Consult with lawyers, accountants, and other professionals. - **Merchant fees** – These are costs that merchants like Shopify and Amazon charge. - **Payroll, payroll taxes, and processing** – Expenses related to paying employees and processing those payments. - **Recruiting & HR** – Costs associated with finding and hiring employees. - **Training & Education** – Expenses related to furthering your or your employees’ business education. - **Software and tools** – Many tools you use for your company are expenses (and tax-deductible). - **Rent or lease** – If you have a physical store or office, you can add it as an expense. - **Utilities** – Many utilities, including the Internet, are business expenses. These are just a few examples. You’ll find more inside the small business expense tracking spreadsheet. ## What is the best way to track expenses for small businesses? At this stage, you know why it’s important to track business expenses, but how do you do it? You have two options: business expense tracking spreadsheets or apps. ### 1. Business expense tracking apps The best options for business expense tracking are expense tracker apps. These solutions sync to your bank accounts and business credit cards and categorize your expenses. This eliminates most of the manual work and automates inputting the costs yourself in a spreadsheet. As a result, the only expenses you usually add manually are those you pay for in cash. Some business expense tracking apps include: - Mint - Quickbooks (integrates with xendoo) - Xero (integrates with xendoo) - Zoho Expense - Expensify ### 2. Business expense tracking spreadsheets Using this [free business expense tracking spreadsheet](https://docs.google.com/spreadsheets/d/1-DIqhqtNX8UBgSIVrfq3vYZjNvIr57oyZkbSA1CMUNo/edit#gid=2013022766) is the ideal option. Expense tracking spreadsheets use standardized templates to help you track various business expenses and key details. It’s the perfect middle ground between expense tracker apps and other inadequate methods. With our free expense tracking template, you won’t have to worry about building your own and figuring out the categories to include. It includes a list of the common small business expenses and sections for other expenses, gross revenues, refunds, and total net income.