Expenses

An expense is an amount paid regularly towards ongoing business operations. Expenses help determine and evaluate a company's overall performance.

Expense payments are important to a company's ability to generate revenues. Expenses directly impact profitability ratios or the amount by which revenues or profits exceed the costs and expenses associated with doing business.

Depending on the type and size of the business there can be many or little expenses. Expenses depend on many factors related to business operations just as business operations are dependent on expenses.

Common expenses might include:

  • Cost of goods sold for ordinary business operations
  • Wages, salaries, commissions, other labor (such as per-piece contracts)
  • Repairs and maintenance
  • Rent
  • Utilities (such as heat, A/C, lighting, water, telephone)
  • Insurance rates
  • Payable interest
  • Bank charges/fees
  • Losses on sales of non-current assets

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