What Is Operating Expense?
Day-to-day costs required to run a business, excluding cost of goods sold.
Detailed Explanation
Includes rent, salaries, utilities, and software subscriptions. Operating expenses are invoiced regularly and tracked against budget.
Example
Monthly office rent of $3,000 is an operating expense recorded when the landlord's invoice is received.
Why It Matters
Controlling operating expenses directly impacts net profit and cash runway.
Related Resources
Related Accounting Basics Terms
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