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Expenses can be classified as recurring and variable. Fixed expenses include car payments, rent, and insurance. Expenses can also change as you change your lifestyle. In addition, discretionary expenses include coffee shop visits, movies, and dining out with friends. By cutting out these expenses from your budget, you could save hundreds of dollars.

The types of expenses vary depending on the nature of the business. Some expenses are related to the primary business activity, such as sales, marketing, and production. Non-operating expenses do not affect the primary business activity. Examples of variable expenses include rent, payroll, and overtime expenditures. Some expenses are periodic, meaning that they happen only occasionally, and are difficult to plan for.

Many business expenses are deductible, including transportation, lodging, and some meals. Generally, these expenses are 50% or less of the actual costs. However, it is important to note that you must keep receipts for at least three years to avoid an audit by the IRS. To avoid this, it is important to document all business expenses in detail. Fortunately, there is software available to keep track of all your receipts and records.

Expenses are closely related to your business balance sheet|\

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