Common Monthly Business Expenses
Although different types of businesses have different expenses, here is a list of the most common businesses expenses which most businesses must pay:
- Location costs
Every business needs a place to operate, and there is almost always a cost for the location. It might be a mortgage on a building, or rent on a leased office or retail space, or a part of the mortgage on a home.
- Utilities, Phone, and Computer Expenses
Likewise, every business must pay utilities costs: electric, gas, water, sewer, and other city services like trash pickup. For a home business, these costs are pro-rated, depending on the percentage of the home is being used for the business. If you are renting a location, some of these costs might be included in your rent. Don't forget costs for cell phones and computer Internet lines.
- Other services/maintenance
Other services which most businesses incur are maintenance costs on the facility, equipment, and general maintenance. Businesses also have costs for lawn mowing, snow removal, and other outside costs.
- Insurances
Every business needs several types of insurance. For example, you will need property/casualty/liability insurance to cover catastrophic events (like fire and vandalism) and general negligence. You should also have business interruption insurance, which pays if you can't use your business location for a period of time. In addition, you may need specialized insurance, like malpractice or product liability insurance. Disability insurance on you and other key employees is also necessary for most businesses.
- Wages, Salaries, Payroll Taxes, and Benefits
You will need to pay employees according to the payroll system you have set up, including benefits and payroll taxes.
- Supplies
Every month you will probably need to replenish supplies, including office supplies and materialsand special supplies needed for your type of business.
- Professional Fees
Set up a category for professional fees, including those paid to your attorney and CPA/tax advisor. You may not pay these people every month, but budget money in this category just in case.
- Loan and Lease Payments
Monthly payments on loans, lines of credit, and leases should be included in your business expenses.
- Advertising and Marketing Costs
Include monthly costs for advertising (including Yellow Pages) and other marketing and promotion activities, such as newspaper ads, billboards, and online advertising. You could include web maintenance costs here or set up a separate expense category.
- Professional Fees
Fees for your membership in a professional association or business group should be included here, as well as professional publications.
- Travel and Entertainment
Include a category for auto, travel, and entertainment expenses, even if you don't travel regularly.
- Taxes
You will need to set aside money to pay income taxes, self-employment taxes, unemployment and workers compensation taxes, and other business taxes.
- Miscellaneous
Most important, don't forget to include an amount for miscellaneous. You never know what might come up, and you will need money to pay for unexpected expenses.
