Expenses

Expenses are the costs a business incurs in its operations to generate revenue. They can be:

• Fixed Expenses: Rent, salaries, insurance.

• Variable Expenses: Raw materials, shipping, commissions.

• Operating Expenses (OPEX): Day-to-day running costs.

• Capital Expenses (CAPEX): Large, asset-based expenditures like equipment or property.

Properly categorizing, tracking, and managing expenses is critical for profitability, cash flow control, and tax reporting. Expenses are recorded on the income statement and directly impact a company’s net income.

Tools like Timber provide comprehensive expense management features without the hefty price tag of traditional accounting services.