In any business, reimbursement of expenses is unavoidable, but in order to maintain financial health, you should pay attention to many expense categories. Under control and proceed in accordance with the law. There are many types of expenditures in business expenditure categories, including: Non-operating expenses, Fixed and variable expenses, Deductible and non-deductible expenses.
Operating and non-operating expenses: Operating expenses are expenses related to the main activities of your business, such as: About the cost of selling goods. Operating expenses are costs that are not directly related to operating activities, such as Commercial loan interest.
Fixed costs and variable costs-The costs you incur in the operating company can also be divided into fixed costs or variable costs. Fixed costs are fixed costs, no matter how much you sell (for example, rent). Variable costs are costs that vary based on your sales volume (e.g.Direct labor costs). Please note that your operating costs consist of fixed costs and variable costs.
Deductible expenses and non-deductible expenses: Part of your distribution expenses are deductible. This means that you can deduct expenses from the company’s taxable profits and reduce the tax payable. This is one of the reasons why tracking expenses is important. You should also note that deductible expenses may be deducted in whole or in part.
What is an expense account? The company has been around for some time. The expenditure on the expenditure account increases the burden and reduces the loan. Your spending account increases as you spend money. The expense report is temporary, that is, it is reset at the beginning of a new period. Divide the expense account into smaller sub-accounts. This way, you can see the most time spent, track your funds, and stay organized.
The sub-account shows how much you spent on each type of expense. You can create sub-accounts for all expenses (such as salary and advertising). Your expense account should contain the balance of each sub-account and a list of total expenses. Expense reports are not the only account you need to track. Expense account is one of the five main accounts included in the company’s chart of accounts.