Operating expenses, shown on an Income Statement, are costs associated with the day-to-day operation of a business. These expenses can include salaries, rent and utilities of the business premises, legal and professional fees, taxes and other related overhead costs. In short: these are the expenses that are necessary to keep a business running.
By understanding your operational expenses you can make better strategic decisions – enabling you to focus on what drives profitability for your company. If monitored regularly and actively managed, these costs can be reduced or even eliminated – leading to a healthier bottom line!