5 Best Expense Tracking Tools for Businesses

5 Best Expense Tracking Tools for Businesses

Software to help save your business time and money

Are you busy with day-to-day tasks and tend to procrastinate tracking expenses? Are you asking yourself, “why is it important to track expenses in a timely fashion?” Tracking expenses provides you with financial awareness and insight on spending habits, making your life easier come tax season. In addition, if you are audited by the IRS or the State, you will have proper records to verify your deductions on your return. 

Sorting through receipts is time consuming. Using software to track your expenses will SAVE YOU TIME AND MONEY, while allowing your business to operate more efficiently. There are numerous applications (apps) to help you easily track expenses and receipts so we have compiled a list of our top five favorites. We have seen these make a big difference in our clients lives!

1. Expensify

Price: Starting at $4.99/month

  • Having a vast array of features and extensive automation capabilities, Expensify is easily the best expense tracker in our opinion. From expense report management to tracking receipts, Expensify eliminates manual data entry. You simply take a picture of the receipt and details such as merchant, date and price, and they are automatically coded for faster reimbursement.
  • Mileage tracker is also included in the mix.
  • This app makes is easy for businesses to automatically review and approve expenses quickly.
Expensify software screenshot

2. Foreceipt

Price: Free

  • If you want to go paperless tracking receipts, Foreceipt is one of the best apps out there. The cloud-based receipt-capturing app (it uses Google Drive) enables you to securely capture each receipt for all business expenses accrued.
  • Foreceipt has features embedded into the platform, making it an efficient choice for businesses. For example, it allows you to establish budgeting categories, so you can track the types of expenses you or your employees are incurring. It also has a built-in exchange tracker, which allows you to input expenses in any currency.
forereciept software screenshot

3. QuickBooks

Price: Starting at $12/month

  • QuickBooks is a great tool to handle all your business’ finances. Once you connect your credit card account to QuickBooks, scan your receipts with your phone and load them into a mobile app for receipt management. QuickBooks will automatically match the receipts with the existing transaction.
  • QuickBooks also now has the capability to track mileage.
quickbooks software screenshot

4. Shoeboxed

Price: Starting at $29/month

  • Shoeboxed allows business travelers to rapidly capture and categorize business expenses. This app makes it easy for businesses to verify these expenses in real-time.
  • Shoeboxed’s powerful receipt tracking system makes it easy for your accountant to categorize your expenses which will help come tax season. Less time = less money.
  • Unlike many receipt-tracking apps, Shoeboxed enables users to capture business cards and transform them into an easily accessible digital contacts list.
shoeboxed software screenshot

5. Mint

Price: Free

  • Mint is a simple tool for smaller businesses to track where money is going.
  • It enables you to create budgets and goals within the app.
  • The app is user-friendly and gives you a nice snapshot of how much you spend on each expense category monthly or yearly. You can assess where you are spending your money and where you can possibly save money.
  • Another plus when using the Mint app is you are able to set up reminders for large purchases and bills.
mint software screenshot

Questions?

Running your business goes smoother and profits stay higher with the right expense tracking tool. Smith Schafer can help you choose the right tool for your business and guide you through the implementation.

Tariffs & How They Will Impact Your Construction Business

Tariffs & How They Will Impact Your Construction Business

Tariff – a tax on imports or exports, typically between two countries. It is a form of regulation of foreign trade and a policy that taxes foreign products to encourage or safeguard the domestic industry.

In recent years, governments have used tariffs as a form of protectionism. In 2018, the United States government began imposing tariffs on steel, aluminum and lumber from a number of countries. These tariffs were imposed in order to try to protect the United States manufacturing industry. However, these tariffs may lead to negative effects for industries, such as construction, because it relies heavily on these products. Construction businesses need to be:

• aware of these tariffs
• the challenges they could bring
• have strategies in place to address these challenges

Impact of Tariffs on Construction Businesses

Increases in material costs.
As tariffs are an additional tax on the imported materials, the cost of these materials will increase, leading to increased job costs for your construction business. If they cannot be passed to the customer, they will go directly to the bottom line.
Volatility in pricing.
As the government is in control of the tariff policies, at any time there may be changes to the rate or it may be removed completely. Being unable to accurately predict this pricing, may have a negative impact on contracts and budgets, which were completed under different scenarios.
Delays in receipt of materials and project completion.
Tariffs often lead to delays in receipt of materials as processing times at ports of entry typically become longer. Large projects, which had their scheduling completed prior to the tariffs, may face difficulties in reaching completion.
Changes in supply chain or lack of materials.
Tariffs may lead to your vendor’s prices increasing to where you cannot afford. You may need to shop around for the best price. This could lead to difficulties working with a new vendor, decreased reliability in receiving materials or having to settle for the increased costs. Tariffs may also affect the number or type of choices for material specifications for a project, as there may only be a few types of materials in the desired price range.

4 Strategies to Mitigate Challenges

  1. Escalation Clauses
    An escalation clause is a provision in a contract calling for adjustments in fees, wages, or other payments to account for fluctuations in the costs of raw materials or labor. As it relates to tariffs, an escalation clause may be included in a contract to shift the burden of increased material costs from the contractor to the customer.
  2. Supply Bonds
    Supply bonds are used to provide a guarantee that a supplier will deliver the promised materials on time. Securing supply bonds upfront, will mitigate the risk of materials not being delivered if a large tariff is imposed on the vendor in between the time of the signing of the contract and the time of delivery.
  3. Subcontractor Default Insurance
    Subcontractor Default Insurance may be used to recoup costs incurred from a default in performance by a subcontractor. If tariffs affect a subcontractor to a point where they are unable to fulfil their performance requirements, this will help to protect the contractor.
  4. Stay Up-to-Date
    Keep track of current and future proposed tariffs. This will help your construction businesses improve planning and allow you to get in front of the challenges discussed above.

Need help?

Our Construction & Real Estate Group, comprised of numerous professionals, is committed to serving over 800 Minnesota construction and real estate entities. Contact us today to learn business strategies that will help you grow and save you money.

Retirement & Estate Planning Guide for Transportation Business Owners

Retirement & Estate Planning Guide for Transportation Business Owners

As a business owner, you have a lot of responsibilities – budgeting, marketing, selling, and countless other tasks. It is easy to put your own financial plans on the back burner for the sake of growing the business. But it is important for you to have a personal financial plan and to ensure it takes into account the unique considerations and opportunities of owning a business. Below are seven basic tips to start creating your personal financial plan:

1. Save for your own retirement.

The right retirement plan allows you to maximize your retirement savings, while also benefiting your transportation company and employees.

  • Example: You could implement a safe harbor 401(k) plan for your transportation company. This type of plan requires the company to contribute to employees’ savings accounts.  These contributions by the company are completely tax deductible. In addition, a safe harbor 401(k) plan automatically passes annual compliance testing, which will allow you as an owner to maximize your contributions to the plan.

A retirement plan only helps your retirement savings IF you choose to contribute to it. We recommend you maximize your contributions, or at least contribute enough to maximize your company’s matching funds. If you have a 401(k) plan, you can contribute up to $19,000 to it in 2019 (plus another $6,000 if you are over 50). 

2. Create key estate planning documents.

The first step to estate planning is to start with the documents:

  • Will
  • Power of attorney
  • Healthcare directive

Ensure these documents address what happens to your transportation business in the case of your death or disability. Well-executed estate planning documents ensure someone you trust inherits the business or manages business transactions on your behalf.

3. Purchase life and disability insurance.

As a business owner, you should have life and disability insurance policies naming the business as a beneficiary. This will guarantee an income stream to help keep the business operating in your absence.

4. Have a buy-sell agreement.

If your transportation business has multiple owners, you should have a buy-sell agreement in place. Buy-sell agreements specify who can buy an owner’s shares of the business, under what conditions, and at what price. Having this agreement in place now may reduce conflict and potential costs when a business owner exits the business.

5. Create a succession plan.

After completing basic estate planning documents, we recommend creating a succession plan. This lays out, in detail, how the business will prepare for a transition in ownership. If your succession plan includes transferring the business to a family member or key employee, it could be beneficial to start that transfer now.

In 2019, you are allowed to gift up to $15,000 to an individual without incurring a gift tax liability.  If you and your spouse own the business, each of you can gift $15,000. Likewise, if you are transferring the business to an individual and his or her spouse, you can gift each of them $15,000.  Transferring your transportation business this way allows you to transfer a significant portion of your business without any gift or estate tax liabilities.

6. Discuss your plans.

Once you have an estate or succession plan in place, make sure you discuss them with all parties affected. These may be hard conversations, but they are imperative to ensure everyone knows what is at stake. This can help avoid conflict and disappointment later.

7. Review and update your plans regularly.

Finally, you should review your plans regularly and update them as necessary. You may have a new family member or a key employee leave your organization. These things can drastically change your retirement, estate or succession plans. In addition, tax laws are constantly changing, so something that is tax advantageous in one year may not be in a different year. It is important your plan is always up-to-date to reflect your wishes.

Need Help?

Your future can be more secure with the help of a Smith Schafer advisor. We can help you determine the appropriate immediate and long-term retirement and estate planning strategies. The sooner you start planning, the better. We can help with:

  • Review Wills, Trusts & Retirement Plans
  • Asset Restructure
  • Estimate Estate Taxes
  • Identify Tax Savings
  • Succession Planning
  • Valuations
  • Gifting
  • Wealth Management

Hospitality Businesses Guide to Local Sales Tax [Minnesota]

Hospitality Businesses Guide to Local Sales Tax [Minnesota]

As a general rule, local sales tax should be charged to customers on all sales made in a local taxing area. The local tax applies to anyone who is from outside the city or county and picks up items in the local area for business or personal use. This applies even if the customer takes the items outside of the local tax area.

EXEMPTIONS

Do not charge local sales tax on sales of taxable items when:

  • You receive a completed Form ST3 – Certificate of Exemption.
  • You ship or deliver the items to your customer outside the local area.

Note: You must collect local sales tax based on where your customer receives the taxable product or service. The tax should be calculated and charged to the customer based on the final destination of the delivered items. 

Example

If a restaurant (outside the locality) buys and picks up materials in a city with a local tax, the local tax rule applies to this sale. To figure the tax, combine the state tax rate and the local rates. Apply the combined rate to the taxable sales price and round to the nearest full cent. Report local taxes when filing your Minnesota Sales and Use Tax. Note – the figures are reported separately from state taxes.

SALES TAX CALCULATOR

The Minnesota Department of Revenue website has a sales tax calculator to determine the state and local sales and use tax rate to apply to taxable purchases. To find the appropriate sales tax rate for a particular jurisdiction, enter a valid address and city, or enter the full nine digit zip code. The nine digit zip code method is the most accurate. The sales tax calculator DOES NOT include any special local taxes, such as lodging taxes or liquor.

More Information

For additional information, visit the Minnesota Department of Revenue website. Click for a table listing all of the local taxes. 

If you have questions about sales tax or would like assistance with tax planning, Smith Schafer can help! Click here to schedule a free 30 minute consultation.

2019 Tax Planning & Retirement Strategies for Businesses Presentation & FREE download

2019 Tax Planning & Retirement Strategies for Businesses Presentation & FREE download

Smith Schafer Manager, Kyle Spicer and HK Financial held a tax planning and retirement strategies for businesses event at the Golden Valley Country Club. Topics included:

  • Overview of updates after the Tax Cuts and Jobs Act
  • Minnesota’s adoption of Federal Tax Reform
  • Overview of the Qualified Business Income Deduction 
  • Planning considerations for capital purchases
  • Selecting a retirement plan that meets your goals as a business owner

Follow the steps below to receive your copy of the presentation to learn tax savings strategies to save money on your 2019 tax return and effective ways to add money into your retirement accounts.

Enter your email below to download your copy of the presentation.