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
Marketing
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
Salaries
Rent
Rates
Light / Heat
Stationary
Postage
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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Contact me on Instagram or Email me thepetitebookkeeper@outlook.ie
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