Expense Category
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What expense category are start up costs?

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There is no definitive answer to this question, as startup costs can vary greatly depending on the business and the industry. However, there are some general guidelines that can help you determine which expense category is most appropriate for your start up costs.

One-Time Expenses

Some start up costs are one-time expenses, such as the cost of incorporating your business or the cost of leasing office space. These expenses can be classified as either "start up" or "operating" expenses. Start up expenses are those that are incurred in the initial stages of setting up your business, while operating expenses are those that are incurred in the day-to-day operations of your business. One-time expenses should be classified as start up expenses if they are directly related to starting your business and will not be incurred again in the future. For example, the cost of incorporating your business is a start up expense, while the cost of leasing office space is an operating expense.

Recurring Expenses

Other start up costs are recurring expenses, such as the cost of employee salaries or the cost of marketing your business. These expenses should be classified as start up expenses if they are directly related to starting your business and will continue to be incurred in the future. For example, the cost of employee salaries is a start up expense, while the cost of marketing your business is an operating expense.

Capital Expenses

Some start up costs are capital expenses, such as the cost of equipment or the cost of inventory. These expenses should be classified as start up expenses if they are directly related to starting your business and will not be incurred again in the future. For example, the cost of equipment is a start up expense, while the cost of inventory is an operating expense.

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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.
Steve Padis, SVP Finance & Strategy, Barry's
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.

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