spend management, budgeting

9 common types of company expenses to consider when budgeting

December 12, 2019

It can be tricky to develop accurate spending forecasts for the future. Stay on track by considering 9 of these common business expenses.

Every company in the world incurs expenses. They’re an inevitable aspect of running a business, and if your company scales before you learn how to manage expenditures accurately and efficiently, you may overspend investor money, lose thousands to invisible spend, or run into difficulties during tax season.

Case in point: anonymous social media app Yik Yak notoriously reached peak valuation of $400 million and took $73.5 million in VC funding. Three years later, in 2017, the company sold to Square for a paltry $1 million.

Different industries each have their own unique expenses, but here are our picks for the most common types of company expenses most SMEs have to manage. You can make the most of your cash and mitigate risks through careful budgeting and detailed cash flow management.

Wages and labor

Whether you’re a one-man-show or a two-hundred-strong SME, employee salaries are an expense that you must pay regularly.

While operating your business, you may also strike deals with contractors, accountants, lawyers, financial consultants, and other professional service providers. You might also have to pay for employee training, development, and certification. All of these are considered labor costs.

If your company provides personal growth stipends or work-life allowances, we recommend switching to an automated service that can properly track these expenses. Trying to manage a flurry of cafe receipts, online purchase screenshots, and more may take up too much precious time of companies that are trying to scale.

Travel expenses

travel expenses costly

Grab, one of Southeast Asia’s decacorns, is operating in Singapore, Malaysia, Indonesia, and five other Southeast Asian countries. Indonesia-based competitor Gojek is hot on its heels with its own plans to enter Vietnam, the Philippines, Thailand, and Singapore. Southeast Asia is a fragmented, yet powerful market, and many investors and consultants echo the same advice: it’s better to expand sooner than later.

A desire to scale quickly and gain critical mass ASAP has resulted in business travel expenses reaching all-time highs in Southeast Asia. These costs include airfare, mileage, meal allowances, and of course—Grab, Gojek, and taxi services.

According to Amadeus, an international IT travel provider, company spending on business trips is “expected to soar to $900 billion by 2025 from the current $400 billion.”

Office space

Many companies in Singapore rent office space, whether it’s at a shared building, shophouse, or a coworking space.

If you own your office space, then you may have to pay a mortgage. Otherwise, you’ll pay monthly rent costs—depending on your agreement with the property owner, you may also have to pay for Internet.

Other utilities a company has to be cognizant of include heat, electricity, water, and telephone bills.

Advertising and marketing

advertising spend increase

Statista expects SMEs and companies in the Asia Pacific region to spend US$218 billion in advertising in 2021. Advertising and marketing are an integral part of an international scaling strategy, and it’s important to budget for promotional activities. These may include physical advertisements in newspapers, on billboards, and, most importantly, the Internet.

More recently, companies are spending on new third-party marketing channels (such as ecommerce platform search results) and on omnichannel marketing tactics. An omnichannel approach to marketing seeks to integrate all marketing channels — offline and online — to create a seamless shopping experience for customers.

Many apparel and FMCG companies also spend on the development of influencer packages. Traditional influencer marketing—where companies target those with the highest amount of followers—is slowly giving way in favor of partnerships with microinfluencers, or those with 10,000 or less followers. Many have more dedicated followings, more authentic numbers, and lower marketing costs.

Depending on the type of business you run, you’ll likely be handling a plethora of varying marketing and advertising expenses and vendors.

Production, logistics, and product development

If you run a physical goods company, you may incur production expenditures to manufacture and process products. This category includes costs like raw materials, machinery, and maintenance and upkeep.

Costly supply chains can be made more efficient.

You’ll also have to manage packaging and, in some cases, shipping costs. We recommend continually reviewing your procurement and supply chain process to see where you may be able to save money or make positive, sustainable changes.

To compete in an increasingly global market, many companies are spending more on research and development. This activity, which results in the ownership of IP in the form of patents or copyrights, can be marked as a type of operating expense.

Companies in the industrial, technological, pharmaceutical, and healthcare sectors tend to spend the most on R&D.

Misguided spend on product development can doom a company, just as it doomed Yik Yak. The application attempted to pour millions into the development of group chat and strongarm users into adopting permanent handles (removing the very anonymity that made the app so popular in the first place). A widely-cited CB Insights survey found that a lack of market need was the reason 42% of startups failed.

Always stay cognizant of product-market fit and validate consumer needs at every step of the product development process.

SaaS expenses

As a region, Southeast Asia has much to gain from digitalization. A study by Google and Temasek predicts that Southeast Asia's internet economy will exceed $240 billion by 2025, $40 billion higher than previously estimated.

Advances in technology are enabling microfinance institutions to lend more money to those in need, helping traditional homegrown businesses scale, and making education more accessible for millions. These positive impacts are taking place in all Southeast Asian countries, from Thailand to Vietnam to Myanmar and more.

As a result of this need for powerful and reliable technology, companies are budgeting more and more for software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) expenses.

Common types of SaaS/PaaS/IaaS you may encounter:

  • Internal communications platforms like Slack, Twist, or Basecamp
  • Offline-to-online services like Zeemart, a food procurement service in SG
  • Online infrastructure or cloud services like Amazon Web Services
  • Content marketing services like Hubspot


Different types and sizes of businesses will deal with different (and sometimes multiple) types of insurance. Most companies have property and liability insurance for catastrophes like fire, theft, and vandalism. Some companies may also have health coverage and employee benefit costs.

Depending on the nature of your business, you may also pay for specialized costs like malpractice or product liability insurance.

Business subscriptions and legal fees

Don’t underestimate the costs of membership to professional organizations and conference or event fees. You may also incur monthly subscription costs for industry publications.

At the beginning of your SME journey, you may pay company registration fees, which are set nationally or regionally by a governing body. Additional incorporation, trademark, patent, and copyright registration fees vary depending on country, but they can easily cost hundreds of dollars.

If you plan on accepting investor funds, tracking and managing legal fees will become even more complex. You’ll have to designate intellectual property transfers and division of assets and shares between investors; these processes have to be clearly documented and approved by a legal team. Legal fees here would include costs for document review, negotiation with investors, and due diligence to ensure that M&As and fund injections are legally-compliant.

Office supplies

Replenishing office supplies like paper, pens, and other stationery can cost medium-sized SMEs hundreds of dollars per year. LAC Group, an information services provider, suggests budgeting anywhere from $200 to $1000 per employee per year on office supplies alone. When you first move into an office space or after a long period of time, you may also have to buy or replace equipment like desks, computers, and printers.

Depending on laws in your country, you may be able to deduct the purchases of fixed assets from your taxes. The costs of these purchases are usually spread out over a long period of time, which can prove difficult for those without accounting skills.

The intricacies are better discussed with a professional tax consultant, but to make their job easier, keep accurate records that detail the specific costs of these assets, where and when you purchased them, and what their intended purpose is.

Stay on top of these expenses with automated tools

Automated spend management tools like accounting software and automated company cards like those Spenmo offers could make this much easier. Rather than tracking individual receipts, these cards can automatically update your records at the moment of a transaction to allow for real-time tracking and easy analysis.

As a company owner or manager, you’ll have to accurately report on each of these expenses in order to make the most of your funds, grants, and deductions. Start consulting with tax and financial advisors early on to ensure that you’re on the right track.

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