According to the U.S. Bureau of Labor Statistics, nearly half of new businesses fail within the first five years. Common reasons? An ineffective financial strategy and lack of capital. But where does this issue really stem from? Our CPAs have found that an incomplete view of spending is often the silent killer of business growth.
That’s where direct expense reporting in QuickBooks Online (QBO) shines. It gives you real time insights into your spending to ensure that no dollar goes unaccounted for. And, no, it’s not a third party plugin, the functionality is accessible within the software, meaning there’s less risk of integration errors.
Whether you’re running a small business or managing complex finances across multiple teams, direct expense reporting can help keep your business on track for success.
Not sure how to implement it? In this blog, our CPAs will walk you through the steps.
3 Steps to Direct Expense Management with QuickBooks
The following steps ensure that your financial data stays organized, giving you better insights into your spending patterns.
1. Configure QuickBooks for Receipt Management
Before diving into managing expenses, you need to ensure your QuickBooks account is configured to handle receipt submissions seamlessly.
Enable receipt capture:
- Access Banking Menu: Log in to QBO, navigate to the Banking menu, and select the Receipts tab.
- Setup Receipt Email: Use the auto-generated email (like receipts@quickbooks.com) provided by QBO to submit receipts.
- Automate Expense Categorization: Create rules within the Banking tab to help auto-categorize recurring expenses.
2. Register Email Addresses for Receipt Submission
This step ensures that only authorized personnel can contribute to the company’s financial records to safeguard you against fraud and errors.
Register team emails:
- Establish a Secure Forwarding Process: Since receipts must be sent from registered emails, it is important to establish who will have the authority to submit receipts. That way, team members can forward their receipts to the designated representative (e.g., the accounts payable clerk), who will then upload them to QBO from the registered profile.
- Ensure Consistency: Team members should forward their receipts in the same format e.g. PNG or PDF. By standardizing the process, you safeguard against errors and avoid compliance issues.
3. Review and Approve Expenses
Once receipts are uploaded, you must regularly review that the data matches the actual transaction. This will help you avoid messy accounting records.
Receipt Monitoring:
- Regularly check the Receipts tab under Banking to review uploads.
- Manually link unmatched receipts to the corresponding transactions as needed.
Who Would Benefit from Direct Expense Reporting in QuickBooks?
Direct expense reporting in QuickBooks Online is ideal for companies in a critical growth phase that need a reliable way to track and categorize spending. If multiple employees have access to expense cards, QBO’s expense management will help you maintain control and improve transparency, ensuring all expenses are accurately tracked.
Whether you’re scaling operations or aiming for tighter financial management, QuickBooks’ built-in features provide a cost-effective solution to keep finances in check and compliant.
Why Accurate Expense Reporting is Key to Growth
Failing to categorize expenses correctly and overlooking unmatched transactions can skew your financial data and give you a false sense of financial safety. From a growth perspective, this can be dangerous. Having real-time insights into your spending not only helps you identify areas in which you can optimize costs but allows you to make informed decisions too. When it comes to compliance, well-maintained records also safeguard against tax penalties.
At Fusion, our CPAs can help you with an optimized QuickBooks setup to track expenses with accuracy. Contact us today!
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. We base articles on current or proposed tax rules at the time of writing and do not update older posts for tax rule changes. We expressly disclaim all liability regarding actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
