Using Evernote

Expense Tracking Made Easy With Evernote

Accurate expense tracking is vital to the success of any business, no matter how large or small. Detailed tracking will save you more money each year by allowing you to see where you can cut upfront costs and what qualifies as a write-off come tax season.

With so much room for human error, though, it’s surprising that many businesses still fall short. For example, while payroll is one of the largest expenses for most businesses—accounting for upwards of 70% of operating costs—20% of employers still rely on spreadsheets to manage that crucial category! Wise business owners, however, employ smart strategies to track and organize business expenses, improving accuracy and providing visibility into their operations.

Expert tip: When saving/scanning receipts into Evernote, list the tax expense category FIRST in the title, then a description of the expense, then the total amount. Or, you can use tags for each category. At the end of the year, sort notes by category and create an index (clickable link list) which gives you a one-page view of your expenses and the ability to click directly to that receipt if needed.

—Evernote Expert, Lydia Martin

Capture receipts, invoices, and similar documents

The business world isn’t the only one that relies on accurate expense tracking. When it comes to personal finance, keeping track of your month-to-month and yearly expenses can help you save for the future. To paint an accurate financial picture, you’ll need an efficient means of capturing your financial data. This includes money going out, like receipts, and money coming in, like paystubs and invoices. Manually entering information into a spreadsheet is time-consuming and opens the door for human error, though; the smart move is to implement one dedicated system for capturing and scanning expense receipts, both digital and paper.

Power tip: Use Evernote to easily scan financial documents, store them, and sort them. Additionally, save important financial documents sent through email. Just forward the message to your unique Evernote email address, and the file will appear in your account, with the email’s subject line as the note title.

Organize financial information for easy access

Scanning and capturing your important financial documents is only half the battle; accurate expense tracking boils down to proper organization. The right filing system makes it easy to compile final expense reports when a project is completed. It also ensures that no expense falls through the cracks, leading to nasty surprises down the road. Most importantly, proper organization makes identifying your expense projections much easier. While organization won’t keep you from going over budget, it’ll alert you of a problem before it morphs into a crisis.

So what sort of records should you keep, and what are some organizational options to consider? The most important ones are:

  • Receipts (money coming in and going out)
  • Expense and revenue statements
  • Assets reports, including cash-on-hand and credit accounts
  • Payroll reports
  • Taxes (for the past several years as required by the IRS)

Organizational strategies depend on what works for you. Tech-savvy business owners can record everything digitally, organizing their “paperwork” into detailed folders. Once digitized, you can shred any original copies that could easily be replaced, such as monthly utility and credit card/bank statements.

Power tip: Use notebooks and tags as effective organizational tools for expense tracking. Attach any file type to a note, inducing scanned PDFs. Easily attach expense PDFs to any notes on budget or project status. With Evernote’s powerful search functionality, it’s easy to pull up properly tagged documents when you need them, even handwritten ones.

Connect relevant expenses with tasks and schedules

Expense tracking doesn’t provide the full picture when it comes to budgeting. To stay on track, project managers need to combine their expense reports with their project schedule and allocated budget. They’ll conduct Earned Value Analysis (EVA), which measures a project’s current performance against its planned performance to determine accurate projections. EVA integrates three necessary concepts to make accurate predictions:

  • Planned Value (PV): Your budget and schedule
  • Actual Cost (AC): Cost of work performed
  • Earned Value (EV): Value of the work performed when compared to the budget and schedule.

Accurate expense tracking plays an important role when comparing the AC to the PV. Inaccurate expense reports may show that a project is on schedule and under budget when, in reality, it may be on schedule but over budget.

This gets a little technical, but stick with us:

Let’s say you’ve established a PV of $100,000 (total cost) over a five-month period (percentage of planned work completed) or PV = $100,000 * 100% (or 1.0). If you’re trying to figure out your PV for a particular period (let’s say the first two months), your equation would be PV = $100,000 * 40% (or .40), which gives you $40,000. That’s to say, after two months of work, you’ll have only spent $40,000 out of your $100,000 budget, and the work completed is worth $40,000.

Now, to establish your EV, you’ll compare what you hoped to complete for planned work against what was actually finished. Let’s say only 35% of the work was completed in those two months. Your EV = $35,000 compared to your PV of $40,000, indicating that you are behind schedule (12.5% behind schedule to be exact). But, if you weren’t accurately tracking all your expenses, you wouldn’t know any of this.

Power tip: In Evernote, your expense information can live in the same note as your tasks and other relevant information, making it easy to contextualize each financial transaction and see any associated tasks and deadlines. Similarly, you can easily attach financial documents such as receipts, invoices, and more to a note. Even if your expense documents live in a different Evernote notebook, you can easily link them for quick access to the information you need.

Implementing a modern, digital system for accurately tracking business expenses can help you stay organized and warn you of potential problems before they become crises. Start today and see the insights it can bring!

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