Overheads Definition

In business, overheads are defined as the day-to-day operating costs that are not directly related to producing goods or services. These costs can include office rent, utilities, insurance, and salaries for administrative staff. For manufacturers, overheads may also include the cost of raw materials and production facilities.

Overheads can have a significant impact on a company’s bottom line and should be carefully monitored. Inefficient use of overheads can lead to higher costs and lower profits. To ensure that your company is using its overheads effectively, consider outsourcing or automating tasks where possible, and reviewing your overhead expenses regularly.