If you are a “solopreneur” or solo entrepreneur, you may have challenges with keeping track of your expenses.

To take a lot of the pain out of it, you must have a system.  Preferably one that automates things for you… or at least makes it easier to do and to track.

If you are just getting started, or don’t have a system other than the “piley system” (that’s where you just dump everything in a pile on your desk or in a drawer), then try this one.

The envelope system.

Take a folder or an envelope (either a business-sized one or a manila one) and start putting the receipt for every expense in the envelope.  If it is something that you don’t have a receipt for (either you forgot to get one/keep it, or it doesn’t ordinarily have one (tips, mileage, etc.) then create the equivalent.  Create the equivalent by writing the amount, date, and what it is for on a piece of paper and put it in the envelope.

At the end of the month, empty the envelope or folder and enter the information into a spreadsheet.    (If you have a bookkeeper, give them to him/her to track instead.)  Then, put all the receipts into a manila envelope, label it with “Receipts” along with the month and year.  Now put this in your financial file drawer (the place where you will store it along with all the other months for the rest of the year.)

At the end of the year, provide a copy of the spreadsheet to your accountant/CPA/tax accountant.  (You need one of these… don’t try to “save” money by doing your end of year and taxes yourself.  You will eat up more time and risk your business much more than you will ever spend with professional help.  And you will have a lot more fun in your business.)