Expense Category
Human Resources
What expense category is training?
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The answer to this question depends on the type of training being discussed. Generally, training expenses can fall into one of a few different categories:

Operating Expenses

Operating expenses are the costs associated with running your business on a day-to-day basis. This includes things like rent, utilities, office supplies, and, in some cases, employee training. Training that is required in order for your employees to do their jobs (such as safety training) is typically considered an operating expense.

Capital Expenses

Capital expenses are the costs associated with long-term investments in your business, such as the purchase of equipment or real estate. They are typically not incurred on a regular basis. Training that is not required for employees to do their jobs, but is instead meant to help them become more skilled or knowledgeable in their field (such as management training) is typically considered a capital expense.

Other

There are other, less common categories of expenses that training could fall into, depending on the specifics of the training. For example, if the training is for a new employee, it could be considered a new hire expense. If the training is part of a larger event or conference, it could be considered a travel expense. And if the training is mandatory but not job-related (such as sexual harassment training), it could be considered a compliance expense.

In general, the best way to determine which category an expense falls into is to ask yourself what the purpose of the expense is. Is it something that is necessary for your employees to do their jobs? Is it an investment in your business that will have long-term benefits? Or is it something else entirely? Once you have determined the purpose of the expense, you can more easily categorize it correctly.

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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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