Expenses resulting from the operation of a company: payment of services, rent…
Operational expenses are the money that a company or an organization must disburse in concept of the development of the different activities that it displays.. Among the most common we can mention the following: payment for the rent of the premises or the office in which it is based, payment of salaries to its employees and purchase of supplies, among the main ones.
In other words, in some way, operating expenses are those that a company will allocate to keep your company status active, or, failing that, to modify the inactive condition in case it is not, in order to be able to return to optimal working conditions.
This type of expense, for example, is associated with the normal operation of a company and is contrasted with non-operational expenses, which are those that are carried out by the business organization in an extraordinary manner and are not frequent, such as operational expenses that Yes they are.
Essential to determine the profitability of a business
On the other hand, they are considered as ordinary costs and with them the company intends to obtain various benefits that will help it to carry out its work accordingly and of course aspire to achieve its objectives. We have already mentioned some of them and we could add light, for example, without it the Internet connection would be impossible and therefore the business that this route currently allows is unfeasible.
It is important to note that these expenses must be taken into account when determining the profitability of a company. A large expense in this regard could harm the finances of a business and complicate its sustainability.
The end of all businesses is profitability and by case is that the cost of operating expenses is key when it comes to achieving this goal. If the operational expenses that a company has are not low but rather high, then they must be considered in the strategies so that the objective is not harmed.
A tendency of the companies is to have these expenses lower if they are high or to always seek that they are as low as possible so that this does not complicate their activity, or that increases in production must be transferred to solve them.
The use of technology is a common strategy when it comes to reducing this type of expense.
So, any venture or project must carry out a projection of this type of expense before starting in order to have a clear idea if the business is viable or not. Of course, this task must be faced by professionals with extensive knowledge in this regard.
Type of operating expenses
Operating expenses are divided into four types: administrative expenses (salaries and those office services), financial expenses (interest payments, check issuance), sunk expenses (are those expenses that are made before the beginning of the operations corresponding to the activities) and representation expenses (Includes travel expenses, mobility in them, for meals, among others).
Operating expenses are also often called indirect expenses, since as we indicated above, they correspond to the operation of the business, therefore, they do not turn out to be investments, such as the expense that is disbursed for the purchase of a machine , which does turn out to be an investment.
So, An investment is the placement of capital that is made with the objective of obtaining a future profit.that is, when you invest, you are resigning an immediate benefit for a future one.
And this is where the main difference between investment and operational expenses lies, since the latter are absolutely intended for the operation of the business in question and they do not materialize while waiting for a future benefit, but the mission is to facilitate the subsistence of the business.
The purchase of a photocopier is an investment for a company, meanwhile, the sheets that are purchased to capture the photocopies, maintenance and everything that it requires to maintain its operation are operational expenses.
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