What are Business Expenses?

Business Expenses are the operational costs incurred by a company in the course of running its daily operations. These expenses are typically tax-deductible and recorded in a company’s financial statements to assess profitability and manage budgets.

Types of Business Expenses

• Fixed Expenses: Rent, salaries, insurance

• Variable Expenses: Inventory costs, shipping fees, commissions

• Operational Expenses: Utilities, internet, office supplies

• Marketing Expenses: Advertising, events, digital campaigns

Example

A digital agency’s business expenses may include employee salaries, office rent, software subscriptions, and marketing spend.

Why They Matter

• Essential for calculating taxable income

• Influence pricing strategies and financial planning

• Help track cash flow and profitability