At times companies also require demonstration material in order to train the candidates, which is again categorized under Education and training expenses. Otherwise, companies send their employees to external institutes to take some special training course which is also a big expense. Few companies have their own training department which costs extra expenses and company needs to pay monthly salaries to the trainers. Therefore, a company requires to spend a handsome sum of money to provide training courses to the employees. Technology is rapidly changing and with the emergence of new technology, the ways of doing work are also changing. These types of business expenses form a substantial expense on an organization which is the expenditure of educating and training their employees. Handling accounts is a complex task which requires a big team.Īlso Read Bartering - Definition, History, Benefits and Disadvantages 4) Education and training expenses It is important to maintain the record of every day’s expenses and profits. 3) Accounting and Banks expensesĪccounts and Banks are the types of business expenses, which are essential parts of every business. The advantage of leasing property is that the rental cost will remain the same for the entire period whereas the disadvantage is that you can not leave the place before the end of the decided time period. You can set up your business by leasing property for a fixed period of time. Location can be leased for any period of time such as 5 years. Sometimes some people lease a location from the owner to set up their business. However, interest rates are quite high which is a disadvantage, because you will end up paying more. The advantage of mortgage is that you will get money instantly. The cost of a mortgage in the office building is also to be included in the annual expenses. Mortgage cost is a type of business expense which is a loan that a company acquires from authorized banks to buy a piece of land for office or factory location. The advantage of getting a place on rent is that it can be vacated if the business doesn’t work out without any major loss while the disadvantage is that rent keeps on increasing with every financial year. It also includes the cost of exclusive location for some special event. It must not be forgotten while preparing a monthly/annual budget. Rent paid for the office location is one of the types of expenses which also makes a big part of the Monthly / annual expenses. a) Rental costīusinesses require a place to operate which almost always requires a cost to pay.
The three types of location costs are mentioned below. Location costs are the types of business expenses which are usually categorized into further three types. Also Read Business Model of Infosys and its Revenue Model 2) Location cost
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