Office Expenses are incurred to keep the business running profitably. They will likely be well-spent cash if they help ownership and management be more efficient and effective. Any time the money spent here is distracting management’s attention from generating sales at a profit that builds cash reserves then it is not only a waste of money, it’s a waste of time and money.
Overview
Office expenses represent any expense related to office consumables, computers, software, and equipment regularly used in the office to keep the business running.
Typical expenses include postage, printer ink, paper clips, paper, and staples. Electronic equipment, such as a computer, software, printer, fax machine, and furniture, such as a desk or chair, are considered office expenses if the item is used solely for the business.
The question about this expense is less about spend and more about how it enables management to generate and convert Net Sales into profits. If that isn’t happening, then it’s time to make changes by either ending the Office Expense or picking up new ones that help management get, do, and enable work.