This article discusses the business expenses entrepreneurs should track on a regular basis. These are expenses you may have as a new online business owner.

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When you do a great job of tracking your expenses, your business will benefit from knowing how much you can plan to put in your pocket each month.

Reaching your income goals will happen a lot more often when you build systems, establish realistic, achievable goals, and break them into manageable, bite sized pieces. 

When you track your expenses and you find that you're not reaching your goals, you can figure out how to add, subtract or make the adjustments to things to help you get to where you need to be.

Breaking things into bite sized pieces will help you accomplish any major project.

How to Track Your Expenses

The best way to track your expenses is by using the way that works best for you. Some people like using accounting programs like Quickbooks and others create spreadsheets like the one shown below to keep track of business and personal finances. Use whatever method you choose,but don't overlook this important business building activity. 

If the cost of Quickbooks is out of your budget, you might want to keep it simple, especially when starting out.

To keep it simple, you can create an Excel or a Google Sheets spreadsheet that will allow you to track your expenses. 

If you need help tracking your expenses, we have an affordable Income and Expense tracker spreadsheet that we sell in our shop that you can use to track expenses on a monthly basis. You just drop in your numbers and it will calculate your net income each month.

You will even be able to make income goal projections by adding the amount you want to make each month with the price of the product you're selling.

The income goals tab on the spreadsheet will calculate the amount you will need to sell on daily, weekly basis. to reach that goal.

You'll be able to reach your income goals much faster when  understand where you are today. Understanding how you exceeded or missed your goals can help you improve next month getting you closer to your overall goals. .

The actual expenses you will incur will be dependent on how you run your unique business. This article will give you a pretty good idea of what you will need to track and manage. 

Don't Miss Out: Consult a Tax Professional

It's important to consult a tax expert when it comes to the items you can write off on your taxes. Keeping your receipts and any documentation that you would need for tax purposes, because some of these items can be written off as business expenses.

You may not experience all of these expenses, but it's important to set up a system that will enable you to track any expenses. 

Website and Hosting Costs

Domain Registration. To get started all you need are a domain that you can get by registering what you want to call your site with a company like Bluehost, I would try to find a site that will provide your domain free for the first year, which will allow you to start earning before you have to pay for your domain. If not, domains are only paid once a year and they are usually really inexpensive. 

Web hosting - If you're using WordPress or any other self hosted platform, you will need a server to place your site files on. Bluehost is a great web hosting company to start out and they have very affordable plans for starting a website or blog. They also have plans for setting up a shop if you're interested in eCommerce. 

SSL certificate for secure transactions - If you're selling products you will need a secure environment for your customer's credit card information and transaction processing. Bluehost will provide a free SSL certificate for the first year when you sign up for their Choice plan. 

Website Development

Web design and development

focused, high performing website. 

Today with so many great site builders, that is no longer the case. If you're up to the challenge, you can build your own blog and the tool we use has all the themes and plugins needed for a conversion focused WordPress site that you own and control. 

We'll show you how to build a blog or website with eCommerce functionality for free with conversion focused tools and step by step videos and instructions.

Sign up for our free course, or if you would like, we will build a site for you.

Content Creation Expenses

This will depend on the kind of business you start. For example, you might need photography equipment (if you're creating product images), or you might want to use your cell phone. Cell phones have great camera and video applications that you can use until your business grows. 

Graphics and design software to create great looking images and designs, you can use Canva, which is free. Most of the images and many of the videos we have created for this site were created using Canva. There's no need to pay a lot of money to create the images you'll need for your platform. 

For writing, you can use a free tool called Google Docs, Google Sheets and Google Slides. These applications can be used on your favorite device, including your phone and the documents you create can be turned into PDF's that can be shared online. Content creation has never been easier or more affordable. 

Inventory and Products

This will only apply if you make handmade goods or create and manufacture physical products.

It also applies if you are responsible for shipping ready made physical products to customers.

Cost of acquiring materials or products that you sell. That includes the cost of buying, the amount your supplier charges to ship the items to you and the cost of any packaging materials you use to ship products to your customers. 

Marketing and Advertising

Social media marketing. This is free and should be your go to source of advertising when starting out.

Once you learn more about what works for your audience, then it's a good idea to start using paid advertising that sends potential customers to your lead generation system to accelerate the growth of your online business. 

Pay per click (PPC) advertising. Creating an ad on social media platforms is a great way to enter the world of PPC marketing.

With this form of advertising it's important to understand your audience, and focus on how your product can help them solve problems or reach their goals. When using paid advertising it's best to send visitors to a landing page that has an opt in form. 

The landing page should elaborate on the pain points and challenges your potential customers are facing and list out how your product will help them overcome those issues.

Once someone signs up you can continue the conversation and provide them with educational information that will help them understand what they will receive when they buy your product. 

Influencer collaborations. In this busy, crowded place called the internet, it's important to build teams and collaborate as much as possible with like minded business owners. You can work together on projects, share each other's content and help each other grow. 

Promotional materials (business cards, flyers, etc.). These items can also be created for free using Canva and sent electronically or mailed to customers and potential customers. 

Search Engine Optimization (SEO)

SEO tools and software. We use a WordPress plugin called RankMath for SEO. We've used other tools in the past, but we like the additional benefits and training tutorials that come with RankMath.

However you can use the tool that works best for you. This is something you will need if you have a blog, website or eCommerce store.

You can find any number of tools that will help you optimize your content and perform keyword research for each piece of content you create. 

SEO services (if outsourced). You can also find a freelancer that specializes in SEO to perform the service for you. Sites like Fiverr  and Upwork are good places to find freelancers that specialize in this service. 

Payment Processing

Payment gateway fees. If you use WooCommerce, or Shopify, there will be payment processors available that you can enable, so that you can take credit cards and other forms of payment.  These payment processors will help you sell more by making it convenient for your customers to pay. 

These are the fees that payment processor charge for handling transactions for your business. Tracking these expenses will help you understand how much you will be able to place in your bank account each month. 

Credit card processing fees. You should track every purchase made for your business, plus any expenses, including interest and fees charged by your credit card company. 

eCommerce Platform Fees

Subscription fees for the platform you use. For example there are monthly fees associated with using Shopify.  However, WooCommerce is free, and if you choose this platform you can install it as a plugin using your existing WordPress installation. 

Transaction fees on sales. We discussed transaction fees under payment processors. If there are additional fees charged by your eCommerce platform you should track those as well. 

Shipping and Fulfillment

Shipping software. This applies to your business if you ship products to your customers. 

Packaging supplies. This applies to purchasing the supplies you need to ship products out to your customers. 

Shipping and Mailing fees. The fees you pay for postage and shipping products to customers.  

Shipping Containers. The cost for shipping containers, in addition to product packaging that was covered under the section on Inventory. 

Legal and Financial

Business licenses and permits. You will need to make sure that your business is legal to avoid issues in the future. 

Trademark registration. If this applies, be sure to track any expenses under start up and place any renewals on your calendar. 

Legal consultation fees. It's best to consult with an attorne when there are things you have questions about. Be sure to track any consultation fees. 

Accounting software or services. There are any number of accounting software applications that you can use to track business expenses. It's a really great idea to keep your personal and business expenses separate. 

Office Supplies and Equipment

Utilities and Communications

Internet and phone bills. An online business relies on having a stable internet connection for creating uploading and delivering content. You can use your home connection for content creation and there are certain applications that are suitable for using a cell phone. 

Email marketing software. An email marketing provider is a necessity for online marketing. We use aWeber for our email marketing provider. Sign up with them and receive a free guide that shows you what you say when communicating with your new subscribers.

Keep in mind that you can use any number of email marketing companies. 

I would recommend using a company that allows you to have a large number of subscribers before you have to pay a monthly fee. You would also want to work with a company that allows you to set up automations or business journeys so that you can create series of emails that you can send new subscribers. 

Your email marketing company will enable you to build your list and create an audience of loyal, engaged customers that are vital to any online business. The expenses related to email marketing software or any software can be written off. 

Virtual meeting tools. Again, this is an area that can potentially be written off, if you use tools like Zoom, Google Meets or other tools to conduct regular meetings, keep track of your expenses for tax time. Your tax advisor will help you figure out the specific expenses you can write off on your taxes.  

Insurance

Business liability insurance. Track the expenses related to your costs for insurance. You need coverage that will protect you in the event of an accident or if someone decides to try and sue you for damages related to your company. 

Product liability insurance (if applicable). This will cover you in the event of product related issues. Be sure to track the expenses for all insurance related costs. 

Professional Services

Many of the tasks you will need to do to run your business can be performed by others. Here are some of the freelancers you might hire to work for you.

Graphic designers for branding. If you're not good at the visual design side of things you can use services like Fiverr to find someone who can perform work on a project by project basis.

If you have even a hint of design skills, you might consider using a free tool like Canva to create amazing looking visuals for your business. 

Copywriters for content creation. The same things goes for the written word. If you are not the best writer, you can hire someone or use tools like ChatGPT to create content for your business. 

Travel and Conferences

Expenses related to travel and conferences involves using your personal car, rental cars, airfare, trains, hotels, AirBnB's and more to meet clients, attend conferences and training. 

These expenses should be tracked and managed by keeping receipts, and tracking data. Some of these items can be written off during tax time. This is not tax advice, be sure to consult a tax professional when the time comes.  

Education and Training 

Courses or workshops related to your industry. There are many courses offered in an online format these days. While you may not have expenses for travel, you may end up paying quite a bit for courses that help you learn how to build and grow your online business.

Skill development resources. If you have to re-educate yourself because of a layoff or company closure, you will want to keep your receipts and evidence that you've taken the course(s).

Any notes, results achieved and any documentation that might support that you actually attended the course and that it helped you reach your goals. 

Returns and Refunds

This includes costs associated with processing returns or refunds.

Miscellaneous

Unexpected expenses or contingencies.

Wrapping It Up

Tracking your expenses is one of the ways to understand your business and obtain the bottom line. Instead of wondering how your business is doing, you will know how it's doing. And you can make changes to improve your results.