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Tuesday, December 19, 2006

Business Expenses: How Do You Track Your Admin Expenses as Part of Your Business?

You need to budget business expenses during start-up and categorize them into type. Administrative expenses are one of the more important categories of business expenses and are related to the every-day operations of your company.

What Are Your Administrative Expenses?

When preparing your budget and other pro forma statements, you should know the options that will affect each of the following business expenses:

1. Payroll. Your business has to be able to pay you to function. It might be regular or infrequent, but there needs to be a budget for it.

2. Telecommunications. These types of business expenses include cell phones, business phone lines and access to Internet.

3. Insurance. This business expense is incredibly important to the administrative function of your business. Think about all types of insurance, including business, general liability, casualty and health insurance.

4. Health insurance. This business expense is very large and the following tip can help you figure it out best: stay on your spouse’s policy if you have one. If COBRA is an option, you should take that as well.

5. Bank fees. This business expense is something you may not think about. Banks will charge a fee when you open a business account and charge a higher monthly fee than the fee attached to personal accounts.

6. Credit card company fees. These business expenses will add up to a great business expense, usually about two or three percent per transaction. Small business owners often use American Express, which has an even higher percentage fee attached.

7. Professional fees. These are the types f business expenses that you pay to your accountant or attorney to guide you through different phases of your business.

8. Also look out for travel and entertainment, office supplies and vehicle expense as part of your business expenses falling within the administrative category.

You have to understand each business expense when you start to budget for elements of your business. Administrative business expenses are often not taken into account fully because they are not obviously sales-related. However, business expenses are a large part of your overall expenses so you need to look at them very closely.

Blogged By: Computer Consulting 101 Professional Kit