Introduction
Running a business in Kenya isn’t easy. Between chasing payments, restocking supplies, and handling customers, tracking expenses might feel like one more headache. But here’s the truth: if you’re not keeping tabs on what you spend, you’re probably paying more tax than you should.
If you own or manage a micro, small, or medium enterprise (MSME), tracking your expenses can help you cut tax costs and grow faster. Here’s how.
✅ Why Expense Tracking is Key for Kenyan MSMEs
When tax season comes, many small businesses realize they’re paying too much. Why? Because they can’t prove their business expenses. Without proper records, you miss out on tax deductions — and that means you pay more to KRA.
Ready to save? Here are 7 smart tips to help you track your expenses and reduce your tax burden legally.
💡 1. Use a Simple Expense Tracker App or Spreadsheet
No need for expensive software. Tools like BiasharaBook, or even a Google Sheet can help. Just log the date, item, amount, and purpose of each expense.
💼 2. Separate Business and Personal Finances
Have a dedicated bank account or M-Pesa till for your business. Mixing funds makes it hard to track — and KRA won’t accept personal expenses as tax-deductible. You can easily categorise your expenses as soon as when making payments either updating your excel sheet, notebook. Using BiasharaBook this is made easy by tagging your mobile money payments whether as sales or expenses.
🧾 3. Keep All Receipts and Invoices
Always ask for a receipt when you spend on business needs. Snap a photo or store it digitally. Without a record, you lose a tax-saving opportunity.
📂 4. Categorize Your Expenses
Group costs into categories like stock, transport, rent, salaries, and utilities. This gives you clarity on spending and simplifies tax filing.
💵 5. Track Cash Payments Too
Many Kenyan businesses operate in cash. Create a “cash log” so you don’t forget small — but important — deductions.Tracking cash payment as well as cash management are among the critical things that should never the neglected when running a small business.
📊 6. Review Monthly, Not Just Annually
Set a reminder every month to review your expenses. It keeps you on track and avoids panic during tax season.
📞 7. Talk to a Tax Pro
You don’t need to do it alone. An accountant or licensed tax agent can help you maximize deductions and stay compliant — even if you’re just starting out.
