What expense category does Klaviyo fall under?

Trying to figure out how to categorize your Klaviyo expenses? You're not alone. Knowing exactly where Klaviyo fits in your expense reports can help streamline your accounting and provide clearer insights into your marketing spend.

Classifying Klaviyo expenses

When it comes to Klaviyo, there are a couple of ways you might classify the expenses:

• Marketing and advertising expenses: If you're using Klaviyo primarily for email and SMS marketing campaigns, it makes sense to categorize it under marketing expenses since it's a tool that helps you engage customers and drive sales.
• Software as a Service (SaaS) expenses: Since Klaviyo is a cloud-based platform you subscribe to, it can also fall under SaaS expenses. If you're leveraging its broader capabilities in customer data management and marketing technology, this might be the way to go.

Examples of Klaviyo expenses

Here are some examples of how Klaviyo expenses might appear in your accounting:

• Email marketing campaign costs: The monthly fees you pay Klaviyo for access to their email marketing tools. These are part of your efforts to reach out to customers and promote your products or services.
• Customer data management fees: If you're using Klaviyo's features to manage customer data and analytics, the expense covers this aspect of your operations.
• Marketing technology investments: Any additional modules or integrations you purchase from Klaviyo to enhance your marketing tech stack.

For instance, an e-commerce business might pay around $60 per month to Klaviyo for their subscription, which would be categorized as software subscription expenses in the expense report.

Tax implications of Klaviyo expenses

When it comes to taxes, properly categorizing your Klaviyo expenses can make a difference. Here's what to keep in mind:

• Deductible business expenses: Expenses for tools like Klaviyo are generally considered ordinary and necessary business expenses, which means they can be deducted from your taxable income.
• Capital expenses: Capital expenses are costs incurred to acquire or upgrade assets, such as premium features or additional user subscriptions, that provide long-term benefits to your business.

By categorizing Klaviyo under the appropriate expense category (like marketing or software), you ensure your financial statements and tax filings are accurate. Tax laws can vary, and a tax professional can provide guidance tailored to your specific situation to make sure you comply with the latest tax laws.

Let Ramp automate your expense process

Managing expenses like Klaviyo subscriptions doesn't have to be a hassle. With Ramp, you can automate expense categorization, tracking, and management, saving you time and reducing errors. Let Ramp handle the details so you can focus on growing your business.