Your Guide to (Finally) Mastering Your Business Expenses

To ensure the growth and performance of your business, paying close attention to your company’s expenses is essential. Manager, CFO, liberal or independent professional, it is a mission that falls upon you. But how to do it ?

In this article, we take an overview of a company’s various expenses, the benefits and best practices of optimized expense management.

What are business expenses?

In order to be able to operate, any company needs certain expenses inherent to its activity. These expenses are more or less significant and more or less regular.

The challenge for companies is not only to know these expenses but also to control them so as to find the most profitable balance.

A freelancer, a freelancer or a freelancer will be solely responsible for the expenses of his company. For companies with employees, expenses can be incurred by the employees, managers or directors of the company. In this case, the manager or accounting team or financial director may be responsible for controlling the budget.

What are the Different Types of Business Expenses?

All businesses can classify their expenses into three categories.

fixed expenses

These are regular charges that a business has to deal with. They do not vary according to fluctuations in activity. In other words, they don’t grow as your production grows. But they are always payable even if you do not realize any turnover.

Fixed fees include:

  • Rent ;
  • office maintenance costs;
  • machinery maintenance;
  • salary (of permanent employees);
  • membership;
  • some transportation costs;
  • Bank charges;
  • Certain local taxes or fees.

These expenses are known in advance and hence can be estimated. The more fixed costs a company has, the more it must produce/sell in order to be profitable.

variable expenses

Variable expenses fluctuate according to turnover or volume of activity. So they can vary from month to month and are more difficult to predict. These include, among others:

  • purchase of raw materials and/or stock;
  • packing cost;
  • traveling expenses;
  • management costs for interim, subcontractor, work-study and trainee personnel;
  • Extraordinary expenses (gifts to customers, expense reports, etc.).

mixed cost

We speak of mixed loads when they are both fixed and variable in nature. The prime example is the salesperson’s salary, with a fixed portion and a variable portion based on sales.

Why Improve Enterprise Expense Management?

As we said, proper management of your company’s expenses is essential to ensure the sustainability of your business. But not only that.

for better profitability

Like managing household income, tracking your business expenses lets you know all expenses and ensure you stay within budget. Thus you are able to identify excessive or wasteful expenses, but also control those that are necessary.

Tracking your business costs is also a way to save money that you can spend on developing new projects.

Evaluating your business expenses regularly is helpful in determining and tracking a break-even point. This performance indicator ensures that you generate enough solid cash flow. The ultimate goal is to continue growing your business.

Thus you have a clear and accurate view of your company’s financial position and are better able to deal with unforeseen events.

For greater transparency with partners

Banks, investors but also suppliers or customers are or should be attentive to the financial health of your company for various reasons of their own. By ensuring strict control over expenses, you show the seriousness of your management and gain the trust of your partners.

Negotiations with suppliers or financing needs can be facilitated once you prove that you will be able to repay your installments or ensure your payments without difficulty.

for greater employee satisfaction

One of the expense items of a company is the cost incurred by the employees.

By establishing a clear, transparent, fair and efficient expense policy, you improve employee satisfaction.

Satisfied employees also improve productivity, loyalty and your company’s image.

4 practices to improve the management and tracking of your company’s expenses

Now that you know all the reasons why you might want to keep track of your business expenses, you’re probably wondering how to do it in practice. Here are 4 best practices for optimizing the management of business expenses.

Question all your business expenses

The first step is to carefully analyze your company’s expenses and question their necessity. The objective is to arbitrate the relevance of each expense.

Thanks to this list, you will be able to list all the expenses of your company, classify them and evaluate their amount.

This step allows you to:

  • determine the fluctuation in the amount of expenses and calculate your margin;
  • Identify unnecessary and potentially recurring expenses.

Are your employees working from home 50% of the time now? You can potentially reduce the cost of office maintenance. Is your telephone subscription too much for your needs? A less expensive formula may be sufficient for you.

By studying each expense item and asking yourself the right questions, it is quite possible that you will be able to save money!

This is a task that takes a little time and should be done weekly or monthly depending on the amount and type of expenditure. But you will get the most out of it only by doing it regularly and methodically.

Establish an expense policy within the company

An expense policy is a set of rules and procedures relating to various costs and established within your structure. It has many purposes.

First, it helps in tracking and streamlining processes related to expenses. It could also be budgets related to expense reports, business trips, inventory purchases or projects.

A clear purchasing and/or spending policy saves time because processes are optimized.

Your expenditure policy should be consistent and transparent. The same procedures and rules apply to all of your employees, regardless of their position. But with processes already structured, it is also easier to identify malfunctions, overruns or abuses, and thus to adapt the rules.

Finally, an expenditure policy ensures the collection and centralization of data. This is an essential element not only to manage your budget better, as we were talking about earlier, but also to prepare your accounts and your analytical monitoring.

Say goodbye to paper and hello to dematerialization

It is the job of employees, managers, and administrators to provide, keep, and store invoices, receipts, and other evidence of expenses. Fortunately, new measures have been taken regarding the dematerialization of administrative documents.

No more paper receipts, you can now scan your expense receipts and invoices as long as you comply with legal obligations.

You save time, space and most of all you avoid the loss and shopping of receipts. To help you, expense report management software are powerful, affordable and, most of all, life-changing tools! We come right back to this.

Take advantage of business expense management tools

Several solutions exist to optimize the management of professional expenses within your company.

bussiness card

With regards to your staff expenses, it is possible to provide professional bank cards. Supplied through your business bank account or a specialized provider, they greatly simplify the control and monitoring of expenses. It is a safe and secure way to provide more autonomy to your employees. And the latter no longer need to incur professional costs.

You still have control over expenses as you can define payment limits, types of merchandise authorized or even geographic regions for card use.

management software

We’ve mentioned them, the expense report software combines a number of features. They not only make possible the entire process of processing an expense report in a digitized and dematerialized manner: scanning the receipt, automatic setting up of the expense report, verification process by hierarchy, reimbursement of expense reports, processing an accountant. but that’s not all.

These are all-in-one tools that centralize all of your company’s expense management.

Indeed, we often find functionality for accounting management, invoicing or cash monitoring. These usually include pro cards as well.

Which solution to choose?

Among all these solutions, we can cite the professional cards offered with online bank accounts dedicated to professionals and businesses. Qonto, Shine or Blank are especially appreciated for the modernity of their services and their cost-effective offers.

For a more complete solution, software for managing expense reports and business expenses is also on the rise. Some tools are completely dedicated to this task: Expensya, N2F or Soldo just to mention the most popular. Others are more global management tools. Regate or iPad, for example, include a billing or accounting module.

It is up to you to define your needs based on the following:

  • the size of your business;
  • the amount and type of business expenses incurred by your employees;
  • the processes you want to digitize;
  • Your budget.

questions to ask

What are the expenses of a business?

The expenses of a business correspond to all expenses. Typically fixed costs (rent, salaries, membership or bank fees, local taxes, etc.), variable costs (costs of subcontractors or temporary employees, raw material purchases, travel costs, etc.) and mixed expenses (salespeople’s salaries).

How to Calculate Business Expenses?

To calculate the expenses of a business, simply add up all the costs of running the business. These two are purchase cost, production cost and distribution cost.

Which business expenses are deductible?

Depending on your situation and if they meet certain criteria, it is possible to deduct expenses such as: the cost of supplies, travel, purchase of materials, professional training, insurance premiums, electricity costs, certain social contributions, etc.

Related Stories


Zen by LegalStart: An anti-scam shield for entrepreneurs

Created almost ten years ago with the aim of simplifying and digitizing the legal...

social network, an opportunity

Social networks have invaded our world. Facebook, Twitter, LinkedIn, YouTube, Pinterest, Instagram... and...

Self-employment in France: revival of activities and income

At the end of 2021, France will have no less than 3.9 million self-employed...

fundraising fashion

Fundraising has become a major trend in the business world. Whether promising startups,...

Ten Mistakes Entrepreneurs Shouldn’t Make

Almost every day, we learn that new laws are coming,...

Which tools for more efficient management?

There are many responsibilities involved in managing a DSI (Department of Computer Services). ...

Popular Categories



Please enter your comment!
Please enter your name here