Expenses resulting from the operation of a company: payment of services, rent ...
Operational expenses are called the money that a company or an organization must disburse for the development of the different activities that it deploys. Among the most common we can cite the following: payment for the rent of the premises or the office in which it is established, payment of salaries to its employees and purchase of supplies, among the main ones.
That is, in some way, operational expenses are those that a company will allocate for keep its status as a company active, or, failing that, to modify the inactive condition in case it is not, in order to be able to return to optimal working conditions.
This type of expenses, for example, is that they are associated with the normal operation of a company and are opposed to non-operational expenses that are those that the business organization carries out in an extraordinary way and do not turn out to be frequent, such as operational expenses that Yes they are.
Essential to determine the profitability of a business
On the other hand, they are considered as ordinary costs and with them the company intends to obtain various benefits that will help it to develop its work in accordance with and of course aspire to the achievement of its objectives. We have already mentioned some and we could add electricity, for example, without it the Internet connection would be impossible and therefore unfeasible to carry out business that this route allows today.
It is important to note that these expenses must be taken into account when determining the profitability of a company. A large expense in this regard could hurt the finances of a business and complicate its sustainability.
The purpose of all businesses is profitability and, for example, the cost of operating expenses is key when it comes to achieving this objective. If the operational expenses that a company has are not low but rather high, then they should be considered in the strategies so that the objective is not harmed.
A trend of companies is to lower these expenses if they are high or to always seek that they are as low as possible so that this does not complicate their activity, or that increases must be transferred to production to solve them.
The use of technology is a common strategy when it comes to reducing these types of expenses.
So, any undertaking or project should be carried out before starting a projection of this type of expenses in order to have a clear idea if the business is viable or not. Of course, this task must be faced by professionals with vast knowledge in this regard.
Type of operational expenses
Operational expenses are divided into four types: administrative expenses (salaries and those services of the office), financial expenses (payment of interest, issuance of checks), sunk expenses (They are those expenses that are made before the start of the operations corresponding to the activities) and representation expenses (They include travel expenses, mobility in them, for meals, among others).
Operational expenses are also often called indirect expenses, since as we indicated above, they correspond to the operation of the business, therefore, they do not turn out to be investments, such as the expense that is disbursed for the purchase of a machine , which does turn out to be an investment.
Then, An investment is the placement of capital that is made with the aim of achieving a future profitIn other words, when you invest, you are resigning an immediate benefit to a future one.
And this is where the main difference between investment and operational expenses lies, since the latter are absolutely intended for the operation of the business in question and they are not materialized in anticipation of a future benefit, but rather the mission is to facilitate the survival of the business.
The purchase of a photocopier is an investment for a company, while the sheets that are purchased to capture the photocopies, maintenance and everything that it requires to maintain its operation are operational expenses.
