![]() Management may also try implementing money saving techniques such as automating parts of the business or reducing salaries for new hires. This cuts down on the actual physical space needed for staff at the office. Often operating expenses receive the most scrutiny from a company, as these types of costs may be less fixed than their non-operating expenses, manufacturing costs and capital expenditures.Ī company’s senior management may try to reduce operating expenses by outsourcing areas of the business or allowing some of the existing staff to work from home. What Does an Increase in Operating Expenses Mean?Īn increase in operating expenses means less profit for a business. Operating Expenses are reflected on a company’s income statement. Marketing (including for social channels like Facebook).Payroll for staff (excluding labor for manufacturing). ![]() If you need income tax advice please contact an accountant in your area. NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. What Does an Increase in Operating Expenses Mean? Operating expenses do not include cost of goods sold (materials, direct labor, manufacturing overhead) or capital expenditures (larger expenses such as buildings or machines). Operating expenses are expenses a business incurs in order to keep it running, such as staff wages and office supplies.
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