Let’s Talk Bookkeeping – Expenses Part 4a

While we’re talking about expenses, let’s add something else you might not think about. This does round back to other blogs I’ve posted.

You must separate what is an expense from what is an investment at least in your mind. An expense is a cost for your immediate business, usually for maintaining the business. An investment is a cost you pay out now that you hope will return a greater reward in the future.

An investment might include purchasing more equipment or taking a class. While these are technically classified as expenses or fixed assets that will have depreciation expenses for bookkeeping purposes, you need to keep in mind that if you expect to receive a long-term payoff it’s an investment. An investment may also be as simple as putting your time and energy into your passion. Invest in skills you will always have. No one can take away skills you learn. Weigh the costs of an investment against the future potential and you might see your expenses diminishing for a greater reward.