What expense category does Vanta fall under?

Using software like Vanta is a key part of maintaining your company's security and compliance. But when it comes to accounting, where do these expenses fit? Let's break down how to categorize Vanta in your expense reports.

Classifying Vanta expenses

When you're categorizing Vanta expenses, they typically fall under the software or IT and software category. More specifically, you might classify them as:

• Security and compliance automation software: Vanta provides automated solutions for security and compliance, making it a key expense in this category.
• SaaS subscriptions: Vanta operates on a subscription model, which is common to Software as a Service (SaaS) tools, and therefore qualifies as a SaaS expense.
• Operational expenses: Vanta supports day-to-day operations related to security and compliance, making it an operational expense.

Examples of Vanta expenses

Here are some instances of how Vanta expenses might appear:

• Monthly subscription fees: Regular payments for access to Vanta's platform.
• Compliance audit services: Costs for specific compliance audits facilitated by Vanta.
• Advanced security features: Expenses for additional security monitoring options.

For example, a tech company paying $1,000 per month for Vanta's comprehensive security package would record this under the operational expenses category.

Tax implications of Vanta expenses

When it's tax time, properly recording Vanta expenses can affect your deductions:

• Deductible business expense: Software expenses like Vanta are generally tax-deductible as ordinary and necessary business costs.
• Capital expenses: Expenses related to the setup, customization, and implementation of Vanta may be considered capital expenses, which need to be depreciated over time.

Categorizing these costs correctly ensures they're accounted for in your tax filings. Keep invoices and receipts for Vanta subscriptions to support your deductions if audited. Accurate classification helps streamline tax preparation and keeps you in line with tax regulations.

Let Ramp automate your expense process

Managing expenses like Vanta doesn't have to be a hassle. Ramp can automate the categorization and tracking of your software expenses, making your financial management seamless. With Ramp, you save time and reduce errors, letting you focus on what matters most—growing your business.