How do I keep track of business expenses as a small business owner?

Updated October 29, 2026By ProfitDrawer

Short answer

Run every business purchase through one separate business account, save a copy of each receipt the same day, and record each expense once a week with its date, payee, category and amount. ProfitDrawer's expense tracking guide says this habit takes about 15 minutes a week. The IRS lets you use any recordkeeping system that clearly shows your income and expenses, and in most cases you keep the records for 3 years from filing.

A simple system has five parts:

One business account. Your statement becomes a first draft of your expense list.
About 10 categories used all year, such as supplies, equipment, vehicle and fuel, advertising, software, insurance, licenses and fees, contract labor, phone and internet, and other.
Same-day receipts. Photograph paper receipts into a folder named by month (for example 2027-03) and file email receipts in one place. For cash with no receipt, note the date, amount, payee and reason.
A weekly update. Add each new expense as one row in a spreadsheet or ledger.
A monthly review. Income minus expenses gives the month's profit; move a share into savings for tax.

If you drive for work, log each trip as you go, since mileage is often a large deduction. Lost receipts cost money: $1,500 of unrecorded supplies overstates self-employment tax by about $211.94 (1,500 x 0.9235 x 0.153), before income tax.

General information, not tax advice.

Source: How to Track Business Expenses: A Simple System for Small Business Owners · Updated October 29, 2026