There are lots of important reasons to track expenses.  Most people I know need to do it, but almost everyone I have ever met is bad about it!  In my case, the reason is simple: Expenses are usually incurred away from my computer, and therefore away from the main place I would track them.  If you have read any of my other stuff, you will already know that I tend to throw technology at every problem, even when technology is not the best solution.  Well – this is yet another case of that!

My problem with expense tracking /reporting is that it’s very time consuming.  Time spent assembling receipts, categorizing expenses, producing invoices, and sending them to my employer or a customer is all time I could have better spent being productive or relaxing.  As with everything else on WLC, my goal with the research I have done here is to minimize the time I spend on nonsense so I can maximize the time I have for things I enjoy (or actually need to do).

I have naturally attempted to track expenses in a little notebook.  It works – of course it does.  But it doesn’t satisfy all of my requirements for an expense tracking system:

1. Ease of use – it needs to be as easy to use as breathing or it won’t happen.
2. Accessible from anywhere – I spend money all the time, and it often isn’t mine.  If I don’t capture it immediately when it happens, I tend to forget.
3. Able to associate keywords with the expense (project, client, category – whatever).
4. Able to generate expense reports / invoices directly (or at least able to easily extract the data into my own invoices).
5. Ability to easily attach a receipt to a report if needed.

Obviously a pocket notebook and a pen can only satisfy some of these requirements, and then only if they are interpreted pretty loosely.  So I set out to discover some handy tools to address them:

1. An obvious tool was to just use a credit card (or charge card, whatever).  Years ago I switched over to using a special American Express card for all my business expenses.  If you only have one project or client that’s great.  Otherwise it just becomes another deadline you need to deal with (since you have to pay off the American Express in full each month).  Not ideal.
2. For years I have had a Palm-based computing device with me all the time.  There are a lot of decent expense tracking programs for the Palm platform – my favorite is Expense Plus from WalletWare – it also works on Pocket PC machines.  It satisfies most of my requirements – but its hard to attach a receipt electronically (since my Palm, at least, doesn’t have a built in scanner).  I like this program, and recommend it if you feel like you can enter all of your expenses on your mobile device AND feel like an invoice generated out of Excel is good enough.
3. More recently, I have started using services that are “live” – mobile computing based and designed to be used from web- or voice-enabled devices.  These services are actually very good, and address most of my requirements.  Among the most interesting are BillaBill and Xpenser. These services have a rich collection of features, even in their “free” versions.  Xpenser has the added benefit that it integrates directly with Jott and Twitter – so if you are using either of these for your work already, it is an obvious choice.

The tool that is right for you might not be same as the tool that is right for me.  I find myself using Xpenser most often now (via Jott and Twitter) to capture expenses.  I stuff the receipts in my wallet (or portfolio if I am at a business meeting), then once I am back at home base I throw them in a bin for later extraction if I need them for expense reports – most of my clients don’t care.  I could probably also take a picture of then with my mobile phone/camera and do something clever that way.  Or use a device like the (purportedly) awesome Neat Receipts from NeatCo to scan and organize them.  That’s probably more work than my clients require.

So, my recommendation is that you take full advantage of technology to track your expenses (and get the money back – that’s the object after all).  How do you track your expenses?  Discuss it in the forums.