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{{Short description|Item requiring cash outflow}}
'''Expenditure''' is an outflow of [[money]], or any form of [[Wealth|fortune]] in general, to another person or group to paying the rent and the rent is so good that I have no rent for the night and the night I will do that for the next day and we will do the same day for the next week for an item or service, or for a category of [[cost]]s. For a [[leasehold estate|tenant]], [[renting|rent]] is an expense. For students or parents, [[tuition]] is an expense. Buying food, clothing, furniture or an automobile is often referred to as an expense. An expense is a cost that is "paid" or "[[Remittance|remitted]]", usually in exchange for something of value. Something that seems to cost a great deal is "expensive". Something that seems to cost little is "inexpensive". "Expenses of the table" are expenses of [[dining]], refreshments, a [[Banquet|feast]], etc.▼
{{redirect|Expenses|the Better Call Saul episode|Expenses (Better Call Saul)}}
▲An '''
In [[accounting]],
Expense is a term also used in [[sociology]], in which a particular fortune or price is sacrificed voluntarily or involuntarily by something or someone to something or somebody else, often in the context that the latter is taking advantage of the former.
==Bookkeeping for expenses==
In
==Cash flow==
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Whether a particular expenditure is classified as an expense, which is reported immediately on the business's [[income statement]] or whether it is classified as a [[capital expenditure]] (or an expenditure subject to [[depreciation]]), which is not an expense flow of funds statement. Though, these latter types of expenditures are reported as expenses when they are depreciated by businesses that use [[Cash-basis versus accrual-basis accounting|accrual-basis accounting]]- as most large businesses and all [[C corporation]]s do.
Defining an expense as capital or income using the most common interpretation depends upon its term.
When an expense is seen as a purchase, it alleviates this distinction. Soon after the purchase
==Deduction of business expenses under the United States tax code==
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Even if something qualifies as an expense, it is not necessarily deductible. As a general rule, expenses are deductible if they relate to a taxpayer's trade or business activity or if the expense is paid or incurred in the production or collection of income from an activity that does not rise to the level of a trade or business (investment activity).
Section 162(a) of the Internal Revenue Code is the deduction provision for business or trade expenses.<ref>{{USCSub|26|162|a}}</ref> In order to be a trade or business expense and qualify for a deduction, it must satisfy 5 elements in addition to qualifying as an expense. It must be (1) ordinary and (2) necessary (''[[Welch v. Helvering]]'' defines this as necessary for the development of the business at least in that they were appropriate and helpful). Expenses paid to preserve one's reputation do not appear to qualify).<ref>{{ussc|name=Welch v. Helvering|link=|volume=290|page=111|pin=113|year=1933}}</ref> In addition, it must be (3) paid or incurred during the taxable year. It must be paid (4) in carrying on (meaning not prior to the start of a business or in creating it) (5) a trade or business activity. To qualify as a trade or business activity, it must be continuous and regular, and profit must be the primary motive. An expense can be a loss or profit. But the loss or profit need not really be an expense.
Section 212 of the Internal Revenue Code is the deduction provision for investment expenses.<ref>{{USC|26|212}}</ref> In addition to being an expense and satisfying elements 1-4 above, expenses are deductible as an investment activity under Section 212 of the Internal Revenue Code if they are (1) for the production or collection of income, (2) for the management, conservation, or maintenance of property held for the production of income, or (3) in connection with the determination, collection, or refund of any tax.
In investing, one
==Expense report==
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Many businesses benefit from automated expense reports systems for [[expense management]]. Depending on the system chosen, these software solutions can reduce time costs, errors, and fraud.
==Expense management==
Expense management is a crucial aspect of both personal and corporate financial well-being. It involves effectively tracking, controlling, and optimizing expenses to ensure financial stability and growth. Whether for individuals or organizations, understanding and managing expenses is essential for various reasons.
On a personal level, expense management enables individuals to maintain a healthy financial life. By tracking and categorizing expenses, individuals gain a clear understanding of where their money is going. This awareness allows for better budgeting, saving, and investing decisions. It empowers individuals to make informed choices about their spending habits, prioritize financial goals, and avoid unnecessary debt. There are outstanding mobile applications that makes personal expense management handy, notably SMoney that are available in both [https://apps.apple.com/us/app/smoney-expense-tracker/id1525674363 iOS] and [https://play.google.com/store/apps/details?id=com.money.smoney%20android&hl=en%20US Android] Versions.
For businesses, effective expense management is vital for maintaining financial health and achieving long-term success. By closely monitoring and controlling expenses, businesses can optimize their operational costs and improve profitability. Expense management helps identify areas of overspending, inefficiencies, or potential cost savings. It allows for strategic decision-making, such as resource allocation, investment planning, and pricing strategies. Moreover, proper expense management ensures compliance with financial regulations and enhances transparency in financial reporting. Whilst there are a plethora of corporate finance and expense management apps, it is notable that [https://www.odoo.com Odoo] and [https://www.expense.com.hk/ Expense.com.hk] are free and simple to use. Other platforms, including [https://www.workstem.com Workstem] and [https://www.info-tech.com.hk/ InfoTech] requires an upfront payment plus relatively complex setup procedures.
In both personal and corporate contexts, expense management contributes to financial stability and resilience. It helps individuals and businesses weather unexpected expenses, emergencies, or economic downturns. By establishing sound financial habits and practices, individuals can build a strong foundation for their future. Similarly, organizations with effective expense management have better cash flow management, which enhances their ability to invest, expand, and adapt to changing market conditions.
==See also==
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==References==
{{
==External links==
{{
* [https://www.irs.gov/publications/p463/ch05.html IRS Expense Guidelines]
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[[Category:Expense| ]]
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