What expense category does customer service come under?
There is no definitive answer to this question, as it will depend on the specific business and how they choose to categorize their expenses. However, customer service is typically considered to be a part of the marketing or sales expense category.
Why is Customer Service Considered a Marketing or Sales Expense?
Customer service is typically considered to be a marketing or sales expense because it is an activity that is used to generate new customers or retain existing customers. Customer service can be used to upsell or cross-sell products and services, which helps to increase revenue.
What Other Expense Categories Could Customer Service Fall Under?
Customer service could also fall under the category of general and administrative expenses. This is because customer service is often used to support other business functions, such as operations or accounting. Additionally, customer service may be considered its own separate category if a business has a large customer service department.
How to Choose the Correct Expense Category for Customer Service
When choosing an expense category for customer service, businesses should consider what the primary purpose of customer service is for their company. If the primary purpose is to generate new customers or sales, then marketing or sales is the most likely category. However, if the primary purpose is to support other business functions, then general and administrative expenses is the most likely category. If customer service is its own separate department, then it may be best to create a separate category for it. Ultimately, the decision will come down to what makes the most sense for the specific business and how they operate.