30 Most Common Expenses for a Business in 2022

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Do you know what the most common expenses for a business are? Do you know what’s different in 2022?

 

The business expenses that you might expect have not changed a whole lot. For the most part, over the decades, you had the same basic categories. But 2022 has a few considerations that most other years in the modern world have not had to deal with.

 

In this post, we’ll take you through the 30 most common business expenses that you can expect to face this year.

 

What is a Business Expense?

 

A wallet on a tablet showing a graph of expenses for a business.

 

A business expense is anything that you pay relating to the operation of the company. Your income statement includes these expenses for a business. Tax computations deduct them from the revenue that the company earns when calculating net income. Some business expenses are also tax-deductible, which means you pay taxes on the amount you have left over after deducting these expenses. 

 

How Do Business Expenses Impact Your Profits?

 

A tablet showing a graph of business profits after expenses.

 

All expenses for a business will come from the business’ revenue. If the business has more expenses than revenue, then the impact on profits is devastating. Of course, a new business, for example, might use capital investment. This supplies money for expenses so the business can continue operations until revenues exceed expenses. 

 

What Are the Most Common Expenses for a Business?

 

Below is a list of the most common business expenses that you might run into. The explanations we give here are not extensive. Please dig into additional research or contact us if you need more help understanding how to manage all of this.

 

Note that your specific expenses can be different depending on your industry, but there are many expenses for a business that overlap.

 

FIXED COSTS

 

Fixed costs are business expenses that are more or less the same all the time. Even those traditionally considered variable can become fixed when you cap them with a budget. Below are examples of these types of expenses.

 

Facility Costs

 

Facility expenses for a business apply to those with physical locations where you own or rent office space. 

 

Building Costs

 

1. Home Office – this is a dedicated business location that happens to be inside the same place you call home. Nowadays, many people work from home rather than renting office space, and this is a legitimate business expense.

 

2. Lease or Long-term Rent for office space is more common than owning a structure.

 

3. Mortgage – if you own an office building, you may have mortgage payments.

 

Utilities

 

4. Water – For any business, water is essential, even if it’s just for hygiene.

 

5. Sewer – as above, this facility is essential even if you work alone.

 

6. Electricity – rarely will a business not use electricity for operations, even if it’s just lighting or HVAC or charging a mobile phone.

 

7. Gas – this applies if you have a gas-powered heating system or use gas to provide people with hot beverages, or something similar – just note that it must be business-related.

 

8. Trash hauling – You will always have expenses for a business related to garbage collection and disposal.

 

Personnel

 

Employee Expenses

 

9. Wages and salaries – This is what you pay by the hour for contractual workers or the fixed amounts that you pay per pay period for employees or regular workers.

 

10. Commissions – This is what you pay on top of wages and salaries if you implement a tiered commission structure.

 

11. Bonuses – This is what you pay on top of wages, salaries, and commissions if you have this supplementary incentive scheme for performance or loyalty, etc.

 

12. Payroll taxes – Sometimes known as withholding tax, this is what you take from an employee’s salary before releasing it, which is paid to the government. (Employees may or may not receive tax returns for overpayments in this area.)

 

13. Benefits – These are forms of compensation that you pay out over and above base wages and base salaries. You might limit these to what is mandated by the government, or award these additionally as you deem fit. Examples are social security contributions, medical and dental benefits, and transportation and food allowances.

 

Marketing and Advertising

 

Conventional

 

14. Print ads and Coupons – Although not too common these days, some businesses still take out newspaper ads and hand out flyers. Some businesses like to combine coupons with their flyers and print ads to attract more people, especially if the target goes beyond brand recognition. This will raise the cost of production because of the bigger size.

 

15. Billboards – even less common than print ads, you might still buy one of these huge signs, even if it’s just to boost awareness and intrigue for a single event.

 

16. Television and radio – You might also air a regular TV ad, even if it’s just for brand awareness. Most businesses that operate in larger cities won’t use radio, but there are areas where radio still has large audiences.

Digital

 

17. Search engine marketing – SEO and PPC account for a larger portion of marketing budgets today than ever before. This is in part due to many businesses moving from physical stores to online operations. 

 

18. Social media ads are becoming one of the most common expenses for businesses because the words of an influencer are powerful. The internet is more popular among younger audiences than local TV these days. Many companies therefore invest in these digital ads over less-viewed TV segments.

 

19. Banner ads – Although video ads are the more popular expense, well-designed graphics also make up a chunk of marketing budgets to supplement ads with sound and moving visual stimuli.

 

20. Blog posts – blogging is still one of the most common expenses for a business in 2022, whether as a tool on its own focused on the end-game call to action, or to support SEO and PPC initiatives.

 

21. Podcasting is also gaining in popularity as a marketing tool. Originally for information sharing, it has become a marketing investment of sorts. 

 

Operating Expenses

 

22. Internet services – Most businesses today need the internet like they need electricity.

 

23. Postage and Courier fees – This only applies if you use the post office or courier services or send communications and documents or ship physical products from orders.

 

24. Necessary office equipment and other tools – This is usually one-time or rare purchases of things used for the business, like desks, chairs, computers, printers, phones, and software.

 

VARIABLE EXPENSES

 

These expenses for a business can go up and down quite dramatically depending on what season it is or what stage of business development you are in.

 

Insurance

 

25. Insurance is not always required, but always recommended, especially when there are other people involved. This can include property/casualty/liability insurance, malpractice insurance, product liability insurance, and disability insurance.

 

Supplies and other Materials

 

26. Miscellaneous – Paper, printer ink, pens, etc.

 

Transportation and Travel

 

27. Transportation, Hotels, and Meals apply as expenses for a business if this is part of operations, like commuting to and from an office, a coach’s speaking engagement, or attending a networking event for business development.

 

Services and Maintenance Expenses

 

28. Facility maintenance – This can include repainting, replacing lighting fixtures and plumbing, landscaping, and snow removal

 

Consultant Fees

 

29. Attorneys, Information Technology, Bookkeepers and Certified Public Accountants as well as any outside professional services you might engage.

 

Taxes

 

30. Taxes will be a big chunk of expenses for a business in any year. Income taxes or self-employment taxes will come regularly, then you might have to pay workers’ compensation taxes and other federal, state, and local taxes as well.

 

Tips to Manage Expenses for your Business

 

A calculator with a printer showing expenses for a business.

 

As mentioned above, many businesses put a cap on certain expenses. This is by far the best and easiest expense management tip to apply. If you control how much money goes into a certain department, you can control how much money goes into each business activity. You will never overdraw your account or force yourself into debt. 

 

Of course, you will always have variable expenses that you can’t strictly plan for. Still, you can put a cap on some kind of miscellaneous fund that will help you spend only so much per month on these variable expenses.

 

Just make sure that you have generous margins of error on your budgets to make room for urgent expenses that fall outside of the budget. As your business grows and you grow with it, you’ll get more comfortable making accurate plans and predictions.

 

Listing out expected expenses using a list like the one we have here is key. You must know what you are facing. Based on a general list, benchmark against other companies in your industry. That gives you a much more accurate picture of the expenses you will need to stay on top of.

 

Tracking business expenses according to these expected expenses will then keep you abreast of all the money going out. You cannot do this without accurate bookkeeping and consistent accounting. You must also have a dedicated business bank account to make sure all the numbers are neat and tidy.

 

Final Thoughts on Common Business Expenses

 

No matter what type of business you run, you will always have related expenses. This post gives you a run-down of only the most common ones.

 

If you run an unconventional business, make sure you dig deeper, using these as inspiration for your own list. This list will help you plan better so there are no surprises when it’s time to pay up.

 

If you want help managing your expenses and getting a good picture of how much you’re spending each month on expenses, reach out to us at EcomBalance and we can help you get that clearer picture.

 

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Hope this information helps!

 

About EcomBalance

 

EcomBalance is a monthly bookkeeping service for eCommerce companies. EcomBalance handles your bookkeeping and sends you a Profit and Loss Statement, Balance Sheet, and Cash Flow Statement by the 15th of each month. EcomBalance also has a sister company, AccountsBalance, that caters to agencies, software companies, coaches, and other online companies.

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Julia Valdez

Julia Valdez is Freelance Writer and Agency Owner. She regularly writes on topics related to Business Finances, Growth, Hiring, Entrepreneurship, and more.

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