Expense Category

What expense category is food?

There is no definitive answer to this question, as the correct expense category for food will depend on the business and its accounting practices. However, some common expense categories for food are 'operating expenses', 'cost of goods sold', or 'inventory'.

Operating Expenses

Operating expenses are those expenses that are necessary for the day-to-day running of the business. This can include rent, utilities, insurance, and, in some cases, food. For businesses that provide food as part of their service, such as restaurants or catering companies, food will usually be classified as an operating expense.

Cost of Goods Sold

Cost of goods sold (COGS) is an accounting term that refers to the direct costs associated with producing the goods or services that a business sells. For businesses that sell food products, such as grocery stores or bakeries, the cost of the food itself will usually be classified as COGS.


Inventory is a term that is used to refer to the raw materials or finished products that a business has on hand. For businesses that sell food products, inventory can include the food itself, as well as any packaging or other supplies that are necessary for selling the food. In some cases, food may be classified as inventory if it is purchased in bulk and held for resale.

The information provided in this article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.
“Accurate classification of expenses is vital for businesses as it forms the backbone of financial reporting, tax compliance, and strategic decision-making. It enables businesses to track and analyze their spending patterns, identify cost-saving opportunities, and assess the profitability of various operations or projects. Having a single source to turn to for accounting classification suggestions, such as the Ramp Expense Classifier tool, is immensely helpful as it provides consistency, reduces ambiguity, and streamlines the expense classification process.”
Audrey Carroll
Senior Manager, Accounting, Ramp
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“As we scale we need tools that are built to scale with us - we need to see expenses real time, we need to see duplicate spend. These types of insights are important to the health of our business.”

Steve Padis
SVP Finance & Strategy, Barry's

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