What expense category does Mailchimp fall under?

When you're sorting through your business expenses, figuring out where to categorize Mailchimp can be a bit confusing. Is it a marketing expense, a software cost, or something else? Let's break it down so you can keep your financials in order.

Classifying Mailchimp expenses

Mailchimp can fit into several expense categories, depending on how you use it. Here are the key ways to categorize Mailchimp:

• Email marketing and automation software: Since Mailchimp helps you create and manage email campaigns, it often falls under this category.
• Marketing expenses: If you're using Mailchimp to support your marketing efforts, you might categorize it as a general marketing expense.
• Software as a Service (SaaS): Mailchimp operates on a subscription basis as a cloud-based service, so it can also be classified as a SaaS expense.
• Advertising and promotion: If Mailchimp is mainly used to promote your products or services, it could be recorded under advertising expenses.

Examples of Mailchimp expenses

Here are some examples to illustrate how Mailchimp expenses might be categorized:

• A small business sending out monthly newsletters might list Mailchimp costs under marketing expenses.
• An online retailer using Mailchimp for automated email campaigns could categorize it as email marketing software.
• A company subscribing to multiple cloud-based tools may group Mailchimp under SaaS expenses.
• If you're running promotions through Mailchimp, you might record it under advertising and promotion.

For example, if you pay $100 per month for Mailchimp to manage your customer outreach, you might record this as a marketing expense in your accounting software.

Tax implications of Mailchimp

When it comes to taxes, Mailchimp expenses can have benefits:

• Deductible business expense: Mailchimp is typically considered an ordinary and necessary business expense, which means it may be tax-deductible.
• Capital expenses: If you purchase a Mailchimp subscription for multiple years, the cost may be considered a capital expense, which would need to be depreciated over the life of the subscription rather than deducted in full in the year of purchase.

Properly categorizing Mailchimp ensures you're accurately reporting expenses on your tax return. Remember to keep receipts and records of your Mailchimp expenses to support any deductions you claim. Since tax laws can be complex, it's also a good idea to consult with a tax professional to make sure you're handling these expenses correctly.

Let Ramp automate your expense process

Keeping track of expenses like Mailchimp doesn't have to be a hassle. Ramp can automate the categorization, tracking, and management of your software and marketing expenses. With Ramp, you can save time and reduce errors, making it easier to manage your finances and focus on growing your business.