Expenses increase are an important business concept that helps organizations track their financial performance. The term is used to describe any added cost associated with running a business, such as increased labor costs or materials needed for production.

When looking at the accounts, this type of expense will be shown on the balance sheet as either a debit or a credit. When an organization incurs more expenses—such as labor, materials, rent, etc.—the amount is then debited from the account. On the flip side, when an organization has decreased their expenses, the amount is credited to the account. Simply put, when an expense increases the accounts must be debited and when the expense decreases the accounts must be credited. Keeping track of these changes in expenses allows businesses to identify areas that need improvement in order to remain profitable.