What expense category do you put entertaining clients in?
There is no definitive answer to this question, as it will depend on the specific business and their accounting practices. However, some businesses may choose to categorize entertaining clients as a marketing expense, while others may view it as a general business expense. Ultimately, it is up to the business owner or finance team to decide which category is most appropriate for their company.
Marketing Expense
Some businesses may view entertaining clients as a marketing expense, as it can be seen as a way to promote and sell the company's products or services. This is particularly common for businesses that entertain clients regularly, such as restaurants or hotels. In this case, the costs associated with entertaining clients would be included in the marketing budget.
General Business Expense
Other businesses may view entertaining clients as a general business expense, as it can be seen as a necessary part of doing business. This is particularly common for businesses that only entertain clients occasionally, such as law firms or banks. In this case, the costs associated with entertaining clients would be included in the general business expenses category.
Conclusion
There is no right or wrong answer when it comes to categorizing expenses for entertaining clients. It will ultimately depend on the specific business and their accounting practices. However, it is important to consider how often the expense is incurred and what purpose it serves in order to make the most accurate decision.