Get Those Expenses Straight!!

gtesWhen translator Benno Groeneveld first struck out on his own, he didn’t bother to invoice clients for business calls. Why not? He didn’t have the time to sort through every call he made when his statement-arrived. But within no time, Groeneveld’s monthly phone bill skyrocketed to $200 (of which $150 was client-related). So when the St. Paul, Minnesota, businessman discovered his long-distance carrier offered call coding–which automatically categorizes client calls by account–he signed up. “For me, it makes a difference in what I charge,” he says.

Tracking out-of-pocket costs is a blight everyone faces–whether you have to document expenses for individuals or the IRS. But it’s a necessity: Overlooked financial outlays and lost receipts add up to mega-dollars down the drain, and late-paid expenses cause cash flow catastrophes. Take Joe Ely, an agricultural debt adviser in Indiana whose out-of-state client visits average $250 apiece. If he were to misplace only one set of receipts a month, he’d lose $3,000 a year.

Thanks to new products, software, and services (and some old-fashioned organizational systems), staying on top of expenses doesn’t have to be a nightmare. By choosing the right solutions, you can claim everything you’re entitled to–without wasting hours wading through receipts. The trick is to find the method that works best for you during each of the three expense steps: collecting receipts, entering amounts, and invoicing.

Step 1: Gathering Proof of Payment
No client will reimburse your expenses without validating that you’ve spent the money. Whether you purchase an airline ticket to San Francisco or buy a salami sandwich, you need to show that you shelled out money. Credit card purchases are naturally easier to duplicate and keep track of each month because you get a statement (although many companies now require cash-register receipts as well), but cash expenses are most often overlooked. “Start expensing as soon as you take money out of your wallet,” insists Cincinnati organizer Stephanie Denton.

To account for cash, she suggests keeping a pen on hand to note the client name and project on the back of, say, each taxicab receipt that’s handed to you. Or tuck a notepad or personal digital assistant (PDA) in your briefcase to log such small costs as magazines, food, or other essentials. For road warriors, Denton recommends securing a mileage book on the dashboard, along with a pencil (pens freeze in cold weather). Then, as soon you get back to your office, immediately file your paperwork. Indiana adviser Ely, for instance, keeps an envelope with the name of the month on the comer of his desk.

For telephone costs, take a tip from translator Groeneveld and enlist your phone company to collect your expense information by subscribing to call coding. Offered by the big three carriers, call coding requires only that you punch in a two- or three-number code with each long-distance call. Sprint (800-877-4646), for instance, sells call coding for $5 per month for an unlimited number of long-distance calls. And, for no extra charge, you can add the service to your calling card (if you travel internationally, however, you have to ask for operator assistance). And AT&T’s Call Manager (800-566-2464) plan is free.

Although your monthly phone statement will be arranged with calls broken out and subtotaled by code–saving you countless hours of mindless work–call coding doesn’t yet import information into your PC. You still have to enter the subtotals yourself.

Step 2: Expense Entry
Even if you’re an expense receipt pack rat, you may skip this vital step–inputting your money outlays into your accounting system. The key to saving time, however, is to let suppliers and technology systems do most of your legwork, so all you have to do is download data to your desktop.

If you’re often on the go, PDAs with Pocket Quicken, such as the Apple Newton MessagePad 130 (800-538-9696, www.; $799), help tally your expenses immediately. Unlike old-fashioned paper logbook entries, which have to be re-entered back at the office, certain PDAs import data directly to your desktop Quicken. Who wants to waste time with double data entry when you can grow a business?

To shave even more hours off your accounting paperwork, consider banking electronically. If you use Quicken 5.0 or higher, for example, you can download your expense information from more than 41 banks, American Express, or Quicken’s own credit card, and print out your costs receipts with each client invoice. Other financial institutions that offer electronic services include Wells Fargo and Security First Network Bank, Neither requires you to call a special phone number or buy additional software to tap your account.

Step 3: Streamline invoicing With Software
Once you’ve entered your expense information into your computer, simplify the process by using programs that are designed to track payment. For instance, ExpensAble 2.0 from Intuit (800-816-8025; Win 95, Win; $49.95) is created for people who travel and have an expense account. It’s an intuitive invoicing program that prompts you for expenses you might have forgotten. It’s even able to sort out complex hotel bills in seconds. What’s more, it imports information from a PDA and offers an assortment of invoice styles for different types of companies. Unfortunately, business owners who bill for expenses that fall outside ExpensAble’s preset categories may find the program doesn’t meet all their needs.

For those who bill by the hour, Timeslips Deluxe 7.0 helps tally your time–and expenses. But if all you need is a simple expense program, Timeslips is too complicated to master for the occasional out-of-pocket cost. If that’s the case, check out Xpense-Pro from Lumtron Technologies (815-568-2602; Win 95, Win; $40).

Cincinnati consultant Denton swears by Quicken to help monitor her costs. For $39, the personal finance program can sort your expenses by both category (type of expense) and class (your client). Then, with all expenses coded by client, Quicken’s report function will produce an itemized list in seconds. Although the program doesn’t include invoice forms, you can import client reports into your word processor. But, adds Denton, many clients accept a Quicken report (perhaps with a brief cover sheet) as an invoice.

On the other hand, West Los Angeles small-business owner Donna McMillan prefers to use QuickBooks. Once you’ve entered your expense data, the program automatically imports it into one of several invoice forms, and then tracks it as accounts receivable.

Even better, QuickBooks helps speed up your payment process–the whole reason you’re expensing in the first place. “A reminder screen will list your outstanding accounts receivables,” McMillan says. “And it’ll sit there until you tell the program you’ve deposited the check.”


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