UNDERSTANDING ACCOUNTING TALK 25 Expenses

It is useful to categorize Expenses into: Manpower, Occupancy, and other Operating Expenses. This breakdown of Expenses helps the manager or the owner of the business to identify where attention and cost control should be focused.

Manpower would include salaries, the employer’s share of social security, employees’ hospitalization and other benefits, allowances, training expenses, and other employee costs.

Occupancy would include cost of utilities (light & water), office / warehouse rent, insurance of premises and equipment, janitorial expenses, security, and other expenses related to the space occupied by or used in the business.

Other Operating Expenses would include office supplies, maintenance & repairs, ISP fees, chargeable transportation expenses, representation, all other expenses not included in Manpower and Occupancy.