Business finance categories are the various ways of classifying and organizing financial resources and activities. These categories allow organizations to better understand where their money is going, how it’s being used, and where it’s coming from. There are three primary business finance categories: operational, capital and contingent.
Operational finance includes activities related to day-to-day operations, such as payroll, inventory purchases and accounts receivable. Capital finance is focused on capital expenditures, such investments in equipment, buildings and other expenses with a long-term payoff. Contingent finance covers any activity or expense that can be planned for but may not necessarily occur, such as taxes or legal fees. By understanding the different types of business finance categories, organizations can make informed decisions about which investments to make and how to allocate resources for maximum effect.