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Understanding your Expenses.

Updated: Feb 1, 2021

We are all about expenses and how to manage them better. 2020 was a difficult year for many businesses, that is why keeping on top of your expense it key to any business success.

There are 3 expense categories that businesses should use. By breaking down into the categories you will have a very clear understanding of where you are spending your money.

1) Selling and Distribution

This includes


Shipping Supplies

Delivery Charges

Travelling and entertainment expenses of salesperson ( if you have a team on the road there is allowances for hotel and meals that needs to be paid)

Running and maintaining of delivery vans

2) Administration Expenses

This includes




Light / Heat



Telephone / Printing

Accountant fee

Office Kitchen supplies

Administration expenses are generally fixed amounts and regardless of the amount of sales that are made they need to be paid. These are the basis operating needs of the business.

3) Financial Expenses

This includes

Interest Expense ( interest bearing debt or finance expense)

Income Tax

Foreign Exchange Loss

Change in fair value of financial assets.

When going through your expenses it is key to determine what type of expense and item is and consider who and why it the expense has incurred.

When you are going through your expenses it is key to understand what is an expense and what is a asset. Eg: Printer is a asset ( as it as economic value ) Ink for the printer is a Administration Expenses as it is consumable.

Now is the time to go through your expenses and go through if you can save money 💵 for the year ahead .

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