How to Track Your Business Transactions

Last updated on September 8th, 2024 at 04:30 am

It is very important to take into account that responsible cryptocurrency ownership derives from the monitoring of all your cryptocurrency transactions. Transactions in the cryptocurrency sphere have no alterations, they are permanent and transparent to the blockchain. This very transparency shows one of the great advantages, although on the other hand, it implies having in place a system to carry out crypto transaction tracking.

It doesn’t matter if you’re an investor or a beginner in this sphere; you have to understand your crypto activity for the following reasons:

• Tax Reporting: In many countries, cryptocurrency holdings and transactions are subject to capital gains tax. Proper record-keeping of all your crypto activities can thus facilitate the process of reporting these activities come filing season.
• Portfolio Management: The essence of portfolio management is to give you a clear picture of what you own and how things are doing. Portfolio transactions tracking allows the assessment of investment strategies in the entirety.
• Security: Keeping a record of your transactions can help identify suspicious activity and potential security breaches.

We will cover some of the ways to keep track of your crypto transactions, from manual spreadsheets to automated portfolio trackers.

Manual Spreadsheets

For those comfortable with basic spreadsheet software like Microsoft Excel or Google Sheets, a manual spreadsheet can be a simple and effective way to track crypto transaction.

Here are some of the major data points you will want to capture in your spreadsheet:

• Date: The date of the transaction.
• Type: Whether it was a buy, sell, transfer, or exchange.
• Coin/Token: The actual cryptocurrency being transacted.
• Amount: The amount of cryptocurrency transferred.
• Price: The price per unit at the time of the transaction (optional, but useful for tax reporting).
• Fee: This refers to any transaction fees involved in trading.
• Exchange/Wallet: Details of the platform or wallet using in this transaction.

While manual spreadsheets offer some flexibility and control, they can become unwieldy if there are too many transactions. Moreover, manual entry increases the number of chances for errors.

Cryptocurrency Portfolio Trackers

Online cryptocurrency portfolio trackers automate the process of tracking every crypto transaction. Below are some of the features that they carry:

• Exchange Integration: Link your crypto exchange accounts to import transaction information automatically.
• Real-Time Price Tracking: Keep an eye on the current value of your holdings.
• Tax Reports: Run reports on your taxes with detailed transaction history (some features may require a paid subscription).
• Performance Analysis: Keep track of how your entire portfolio and individual positions are performing.

Picking a Crypto Portfolio Tracker

There are countless cryptocurrency portfolio trackers, and each one comes with its peculiar strengths and weaknesses. Here are some of the factors that best inform your choice of tracker:

Security: Ensure the platform is protected with the necessary security measures to handle sensitive financial data.

Exchanges and Wallets Supported: Look up whether the tracker supports both platforms that you make purchases on, sell your cryptocurrency to, and store your cryptocurrency with.

Features: Keep in mind what features are most important to you, like tools to report taxes and advanced portfolio analysis.

Pricing: Some of the trackers offer free basic features, while some might have to be subscribed to, to give enhanced functionality.

Here you go with the popular cryptocurrency portfolio trackers that you must consider:

• Koinly
• CoinTracking
• CoinMarketCap
• CoinGecko
• Delta
• Blockchain Explorers

Blockchain viewers are online tools that let one see all transactions on any given blockchain network. Not best for everyday tracking, blockchain explorers will help with:

• Verifying Transactions: Verify an actual transaction by searching for it on the blockchain.
• View Details: Get detailed information about a transaction, such as sender, receiver, and value.

Security Considerations

Regardless of the type of method that one is going to use for tracking their cryptographic transactions, security should be one of the most prioritized things. Here are some best practices:

• Use Strong Passwords: Use unique and complicated passwords for all your cryptocurrency platforms and wallets.
• Enable Two-Factor Authentication (2FA): Whenever possible, activate 2FA for an extra layer of security.
• Phishing Attempts: Be careful of emails or users asking for your login credentials or personal keys.

Conclusion

Effectively following your crypto transactions is arguably one of the most important practices that a user of cryptocurrency could do. A combination of manual spreadsheets, portfolio trackers, and block explorers can provide major insights into your crypto activities and ensure responsible financial management with due diligence. Remember that implementation is always on the front line of security when it comes to solid-passwords, turning on 2FA, and being cautious of scams. Click here magazinehubs for more details.