Operating expenses

This refers to expenses incurred whilst an organisation is carrying out its day-to-day activities.

These are consumable items such as employee payroll and other staff costs, supplies, utility bills, property costs, research and development. They do not include non-consumables such as property or equipment purchases, which are a capital expense.Controlling operating expenses is a key part of operational management, in order to maintain the profitability of the organisation.

Operating expenses is a term normally found in management accounting.

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