![]() One example is paying for electricity.Īn organization can also deduct reasonable administrative expenses from its tax return, so keeping careful track of these expenses may be beneficial. ![]() ![]() Semi-variable expenses: While this type of expense also relates to basic operation, it may also vary depending on company actions. There are two basic categories of administrative expense:įixed expenses: This type of expense is part of the foundational business operation that remains the same regardless of the success of the company. Related: What Are Business Expenses? Definition, Types and Examples Understanding administrative expenses This can help them determine how much money they have left to spend on other business elements, including: This works because tracking administrative expenses can show a business how much money they spend on operations. These expenses are generally separate from expenses that relate to more specific departments like research, development or production.Īdministrative expenses are important because they can help a business monitor its expenses and adjust its spending accordingly. Most administrative expenses include things a company must pay for in order to conduct business, regardless of how many products the company sells. View more jobs on Indeed View More What are administrative expenses?Īdministrative expenses, or administrative expenses, are the regular costs of running a business.
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