I spent several evenings last month sorting through a year’s worth of receipts, identifying business expenses (and occasionally trying to remember exactly who I went to a particular restaurant with in hopes of writing off a lunch). This year, I won’t. This year, I have an amazing secret weapon.
Because I’ve set up an LLC to make my business a little easier to manage, I opened up a separate bank account for my business. I have a debit card just for business expenses now, and as long as I only use it for expenses related to my business — and I only pay for business expenses with that card — all I have to do at the end of the year is collect my bank statements.
You can set up a bank account for your business as a sole proprietorship, but if you’re not sure you’re ready to do that, I’d suggest using a credit card for your business expenses. You have to be committed to paying off your balance each month, in order to avoid getting into financial trouble, but restricting business expenses to one piece of plastic really can make life so much easier.
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Another great tip Thursday!
Wow, that never occurred to me but it makes a lot of sense. Cuts the thinking out of the process!
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