Expenses you should be aware of
It is impossible to run a business without spending money on it, no matter how big or small the business is. The allowable expenses that can go under the business expense category are payments made for the sake of business operation. To help economic growth and support, you should know how these expenses impact your business and how they can be controlled to ensure financial health.
What are the overheads business expenses?
These types of expenses occur inactively no matter what business activities are undertaken, and they vary for different types of businesses. The commons expenses that are deductible are the followings:
- Rent
- Insurance
- Gas & electricity
- Broadband and telephone
- Accounting & Bookkeeping
- Interest and loan repayments
What are the Cost of sales business expenses?
These are the accumulated direct costs used to create a product or service which has been sold by a business. For example, a manufacturer buying parts to create the products that they’re making or a restaurant buying ingredients to make food.
Why the business expenses are important?
To ensure the accuracy and stability of your business you should separate each business expense category. It is important to do so because when your sales go up for sure your cost of goods sold will increase and when the sales are going down your cost of goods sold will decrease; whereas your overheads expenses remain the same unless one is added or reduced. Therefore, the expense management we recommend is to separate your business expenses into two category that can give you a hint of your business position.
