Expense Category

What expense category do materials purchases fall under?

There are a few different ways to categorize expenses, and materials purchases can fall under a few different categories depending on how you choose to track your expenses. For example, you could track all materials purchases under a single category, or you could create subcategories for different types of materials.

One category for All Materials Purchases

If you choose to track all materials purchases under one category, you might label this category "Materials and Supplies." This category would include all expenses related to the purchase of materials, including raw materials, office supplies, and any other type of supplies that are used in your business. This approach can be helpful if you want to get a broad overview of your materials expenses.

Subcategories for Different Types of Materials

If you prefer a more detailed view of your materials expenses, you can create subcategories for different types of materials. For example, you could have a category for "Raw Materials," which would include all expenses related to the purchase of raw materials used in your products or services. You could also have a category for "Office Supplies," which would include all expenses related to the purchase of office supplies, such as paper, pens, and printer ink. This approach can be helpful if you want to track your expenses more closely and get a better understanding of where your money is going.

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.
Purchase of materials
“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.”

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SVP Finance & Strategy, Barry's

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