Expense Category
Utilities

What expense category does shipping come under?

There are a few different ways to categorize expenses, and shipping could fall under a few different categories depending on how you track your expenses. Here are a few possibilities for where shipping could be categorized:

Operating Expenses

If you track your expenses by department, then shipping would likely fall under your "operating expenses". This would include all the costs associated with running your business, like rent, utilities, payroll, and shipping.

Shipping Expenses

Another possibility is to have a separate category just for shipping expenses. This would include all the costs associated with shipping, like postage, packaging, and shipping insurance.

Inventory Expenses

If you track your expenses by product, then shipping would likely fall under your "inventory expenses". This would include all the costs associated with acquiring and storing inventory, like raw materials, manufacturing costs, and shipping.

There is no right or wrong answer for where shipping should be categorized. It depends on how you track your business expenses and what makes the most sense for your business. Talk to your accountant or financial advisor to figure out what system would work best for you.

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.
Shipping
“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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