Tracking expenses is important in business. Part of your accounting routine should include periodically reviewing your expenses and getting rid of certain expenses that are no longer needed.
Why Should You Audit Expenses
Don’t get overwhelmed by the word “audit.” We’re just talking about viewing expenses periodically to identify any that are no longer necessary.
- As your business grows, it’s hard to gauge which expenses are needed and which are not simply by looking at the profit and loss statement.
- Also, as the business grows, it’s hard to know what expenses are important for other team members even if you don’t recognize them.
- By doing an expense auditing routine as part of your normal QuickBooks workflow, you can be confident that you are not wasting money on unneeded expenses.
How To Do An Expense Audit In QuickBooks
This should be done at least annually, but preferably, quarterly for most businesses. This is frequent enough to catch expenses before they go on too long, but not too frequent to slow down your accounting routine.
- You can do this by running a report in QuickBooks for expenses by category or expenses by all vendors.
- If you have a lot of transactions, you can filter the report to identify what matters most either by time, amount, category, or other factors.
- Once you have the data filtered, you can review the expenses to decide which are no longer needed.
In this audio snippet, Bernard Roesch shares how to do an audit of expenses in QuickBooks.