What expense category does New Relic fall under?

When tracking your business expenses, figuring out where to categorize tools like New Relic can be a bit confusing. Let's break down where New Relic fits in your expense reports and why it matters.

Classifying New Relic expenses

New Relic provides cloud-based application performance monitoring and is typically considered a software expense. Here's how you might categorize it:

• Software or SaaS: Since New Relic offers cloud-based services through a subscription, you might list it under software expenses or Software as a Service (SaaS) expenses.
• Application performance monitoring: You could create a subcategory like Application Performance Monitoring (APM) to track expenses for tools that help you monitor and optimize applications.
• Operational expense: Because New Relic charges a recurring subscription fee, it's usually classified as an operational expense (OPEX), covering regular costs needed to run your business.

Examples of New Relic expenses

You might incur New Relic expenses for various reasons:

• Performance monitoring: Use New Relic to keep tabs on your applications' performance, ensuring everything runs smoothly.
• Error tracking: It helps you identify and fix bugs, enhancing the user experience.
• Infrastructure monitoring: Monitor your servers and infrastructure to prevent downtime.

For instance, if a company spends $500 per month on New Relic's standard plan to monitor its web application, then this might be categorized under software or subscription expenses.

Tax implications of New Relic expenses

When it comes to taxes, properly categorizing your New Relic expenses can benefit your business:

• Deductible business expense: Since you rely on New Relic for your operations, its costs are generally tax-deductible.
• Capital expenditures: If you purchase New Relic-related equipment or software that's depreciated over time, such as customized monitoring tools or on-premises infrastructure, these costs may not be immediately deductible and should be depreciated according to relevant tax regulations.

Remember to consult with a tax professional to ensure you're in compliance with the latest tax laws.

Let Ramp automate your expense process

Keeping track of software expenses like New Relic doesn't have to be a hassle. Ramp automates expense categorization, making it easy to monitor subscriptions and manage costs. With real-time tracking and effortless reporting, Ramp helps you stay on top of your expenses so you can focus on what really matters.