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Expense Accounts

Expense accounts track your expenses through a financial year. When a new financial year starts, the balances of your expense accounts are set to zero. When you buy a product that is not an asset, it will be posted on the expense account you select. When you view your profit-and-loss statement, you will see the sum of all your expenses in the period you have selected. You have different groups of expenses:

  1. Cost of Goods Sold
  2. Personell Expenses
  3. Other Operating Expenses
  4. Financial Expenses
  5. Extraordinary Expenses

Cost Of Goods Sold

Cost Of Goods Sold (COGS) is the expenses you have from buying goods that you later sell. The difference between you sales revenues and your cost of goods sold is known as your gross profit margin. Accounts belonging to this group are materials, goods, direct sales costs etc.

Personell Expenses

Personell expenses are expenses related to your employees. These would include salaries and all other benefits you offer your employees.

Other Operating Expenses

Other operating expenses are general expenses incurred in the running of your operation. Telephone expenses, electricity and office consumables are examples of other operating expenses.

Financial Expenses

Financial expenses are expenses such as interest, bank fees and loss on currency.

Extraordinary Expenses

Extraordinary expenses are expenses that are not part of your normal operations and are not included when your operating profit is calculated.