To help your business grow , good management of business expenses is essential.
All these expenses are transcribed in the accounts of your company .
Wondering what are the forms of business expenses? What are the benefits of consistent expense management? And how to proceed with such management? Legalstart answers all your questions.
Complete Guide to Accounting
MINI-SUMMARY:
What are the different types of business expenses?
What are the benefits of good business expense management?
How to manage your business expenses?
What are the different types of business expenses?
Among all the expenses of a company, we come to distinguish two categories of expenses: fixed costs and variable costs.
Fixed business expenses
Fixed costs correspond to the expenses of the company which do not vary according to the volume of production . That is to say, these expenses do not increase when the production of your company increases.
Among these expenses we find, mainly:
staff salaries;
office rent and maintenance costs;
local taxes and duties;
machine maintenance costs;
bank loan interest.
Variable business expenses
Variable expenses meanwhile, correspond to expenses whose amount is directly linked to the level of activity of the company.
The main variable expenses are as follows:
purchases of raw materials;
transport costs;
packaging costs;
subcontracting costs.
Note : some expenses may be both fixed and variable. We will then speak of mixed loads . This is the case for sales salaries, which have a fixed part and a variable part .
All cA company’s expenses must be well managed in order to analyze the various financial flows, thanks to cost accounting in particular.
What are the benefits of good business expense management?
The monitoring of company expenses presents major challenges for the structure. It makes it possible to apprehend certain external events, but also to gain in solidity .
Develop the financial strength of the company
When the company knows , controls and organizes its expenses , it is more inclined to anticipate the vagaries of the market or the economy in general.
The objective is to build up sufficient cash to deal with unforeseen events.
The most effective way to prevent your business from going bankrupt is to build up enough cash. This is why it is recommended to practice business expense management .
Optimize the profitability of your structure
Keeping a table listing the expenses of a business makes it easy and quick to calculate the profitability of your business .
Business expense and revenue management helps check and break even your business . It makes it possible to control profitability by eliminating unnecessary or superfluous expenses. So you can make the necessary decisions at the right time.
Anticipate the tax return
This expense management makes it possible to prepare the tax return of vyour business, serving as the basis for calculating the tax payable by companies .
This also makes it possible to list the expenses deductible from the tax result of your activity.
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How to manage your business expenses?
There are different ways to help you manage business expenses .
First , you can create a budget management table , which will allow you to have an overview of the financial situation of your structure.
This management can also be carried out in a dematerialized way thanks to an expense management table in Excel .
Note : to help you create your table, consider consulting templates on the internet.
You can also seek the help of an accountant to help you manage your business expenses .
Good to know : there are online accounting systems to support different companies in the accounting management of their business.
You now have all the information you need to properly manage business expenses .
To support you in your accounting procedures, do not hesitate to use our Comptastart online accounting software .
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