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Overhead Expenses

Overhead Expenses are the ongoing costs to run a business that aren’t directly tied to creating a product or service. These expenses are crucial for budgeting and financial planning because they must be paid regardless of the company’s current level of production or sales.

Here’s a list of common Overhead Expenses:

1. Rent or Mortgage: Cost of leasing or owning the space where the business operates.

2. Utilities: Expenses for electricity, water, gas, and internet services necessary to maintain the business premises.

3. Insurance: Premiums for property, liability, worker’s compensation, and possibly health insurance for employees.

4. Salaries and Wages: Payments to employees that are not directly involved in the production of goods or services, such as administrative staff, managers, and support teams.

5. Office Supplies: Items like paper, ink, pens, and other stationery needed for day-to-day operations.

6. Software Subscriptions: Costs for software used in the running of the business, including accounting, customer relationship management (CRM), and project management tools.

7. Depreciation: The cost associated with the reduction in value of assets over time, such as computers, furniture, and machinery.

8. Marketing and Advertising: Expenses related to promoting the business, including digital marketing, print ads, and promotional materials.

9. Travel and Entertainment: Costs associated with business travel or entertaining clients, including meals, lodging, and transportation.

10. Professional Fees: Fees for services provided by lawyers, accountants, consultants, and other professionals.

11. Repairs and Maintenance: Costs to maintain or repair business equipment and property to keep everything in working order.

12. Taxes and Licenses: Money spent on business taxes and necessary licenses or permits required to operate legally.

13. Telephone and Communication Expenses: Costs of communication, including telephone services and mobile plans for business operations. Understanding and managing Overhead Expenses is vital for businesses to maintain profitability and ensure long-term sustainability.

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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