Budget Management: It helps in maintaining a realistic budget by providing insights into where the money is going. This allows for better financial planning and resource allocation. Cost Control: Regular monitoring helps identify areas where the business might be overspending, enabling corrective actions to reduce unnecessary costs. Financial Reporting: Accurate expense tracking is essential for preparing financial statements, which are crucial for stakeholder communications and for meeting regulatory requirements. Tax Preparation: Detailed expense records simplify the process of tax preparation and can help in maximizing tax deductions. Fraud Prevention: Regularly reviewing expenses can help in detecting and preventing fraudulent activities within the organization.