What expense category does RingCentral fall under?

Using RingCentral for your business communications but not sure how to categorize it in your expenses? Figuring out where RingCentral fits can simplify your financial tracking and ensure accurate reporting.

Classifying RingCentral expenses

Classifying RingCentral expenses correctly can help keep your books accurate and your budgeting on point. Here are some common ways to categorize RingCentral in your expenses:

• Operating expenses: Since RingCentral is part of your daily operations, you can classify it as an operating expense.
• Telecommunications services: If you're mainly using RingCentral for phone services, placing it under telecommunications expenses makes sense.
• Software subscriptions: RingCentral operates on a subscription model, so you might categorize it under software subscriptions.
• Information technology (IT) expenses: If RingCentral is part of your IT infrastructure, consider recording it as an IT expense.

Examples of RingCentral expenses

To help you see how RingCentral expenses might look in your books, here are some examples:

• Unified communication services: If you're using RingCentral for video conferencing, team messaging, and collaboration tools, these can be recorded under communication and collaboration expenses.
• VoIP phone services: Expenses related to RingCentral's VoIP services might be listed under telecommunication costs.
• Software as a Service (SaaS) subscriptions: Since RingCentral is a cloud-based platform billed monthly or annually, you could list these expenses under SaaS subscriptions.
• Administrative fees: If RingCentral charges a Compliance and Administrative Cost Recovery Fee, it can be recorded under regulatory fees or administrative costs.

For example, if you pay $30 per user per month for RingCentral’s services, you might record this $30 as a software subscription expense.

Tax implications of RingCentral expenses

Understanding the tax implications of RingCentral expenses can help you maximize deductions and keep accurate records. Here are some key points:

• Deductible business expenses: RingCentral expenses are generally considered ordinary and necessary business expenses, making them deductible on your tax return. Remember to include any administrative or compliance fees charged by RingCentral as part of your expenses.
• Business use percentage: If you use RingCentral for both business and personal purposes, you can only deduct the percentage of the expense that corresponds to business use, so it's essential to keep accurate records of your usage.

Ensure you're categorizing RingCentral expenses consistently to maintain accurate financial records. Keep detailed invoices and receipts from RingCentral to support your deductions in case of an audit. Consult with a tax professional to understand how these rules apply to your specific situation.

Let Ramp automate your expense process

Managing expenses like RingCentral can be tedious, but Ramp makes it effortless. With Ramp, you can automate the categorization and tracking of your RingCentral expenses, ensure consistency across your financial records, and gain real-time insights into your spending. Let Ramp streamline your expense management so you can focus on growing your business.