For a technology company like Osoobe Ltd, which provides software development, IT consulting, DevOps, technical support, and develops its own software products, expenses can be organized into the following 20 main categories.
These categories are suitable for budgeting, bookkeeping, financial reporting, and tracking profitability.
# | Expense Category | Examples |
|---|---|---|
1 | Salaries & Payroll | Employee salaries, wages, overtime, bonuses, allowances |
2 | Contractors & Freelancers | Software developers, designers, consultants, project managers |
3 | Employee Benefits | Health insurance, life insurance, pension, staff welfare |
4 | Taxes & Statutory Contributions | Employer NIS, Education Tax, HEART/NSTA contributions, applicable business taxes |
5 | Cloud Hosting & Infrastructure | AWS, DigitalOcean, Azure, VPS, servers, storage, CDN |
6 | Software & Subscriptions | GitHub, GitLab, Figma, Slack, Microsoft 365, AI tools |
7 | Office Rent & Facilities | Office rent, coworking space, maintenance, cleaning |
8 | Utilities | Electricity, water, internet, telephone, mobile plans |
9 | Hardware & Equipment | Laptops, monitors, servers, networking equipment, accessories |
10 | Repairs & Maintenance | Computer repairs, equipment servicing, office maintenance |
11 | Marketing & Advertising | Social media ads, SEO, Google Ads, content creation, branding |
12 | Sales & Business Development | Sales commissions, client meetings, proposals, networking |
13 | Travel & Transportation | Fuel, taxis, airfare, accommodation, parking, business trips |
14 | Professional Services | Accountants, lawyers, auditors, tax advisors, business consultants |
15 | Licensing & Compliance | Business registration, annual returns, permits, certifications |
16 | Banking & Transaction Fees | Bank charges, wire transfers, payment gateway fees, FX charges |
17 | Research & Development | Prototyping, experimentation, product testing, technical research |
18 | Training & Development | Online courses, conferences, certifications, workshops |
19 | Insurance & Risk Management | Business insurance, cyber liability, professional indemnity |
20 | Miscellaneous & Contingency | Unexpected expenses, minor purchases, emergency spending |
For a business that develops and operates its own software products, I recommend tracking these expenses separately to understand the true cost of each product.
Category | Examples |
|---|---|
Product Development | Development of SaaS platforms, mobile apps, internal products |
API & Third-Party Services | SMS, email delivery, maps, AI APIs, verification APIs |
Domain & SSL Services | Domain renewals, SSL certificates, DNS hosting |
Data Storage & Backups | Database hosting, backup storage, disaster recovery |
Cybersecurity | Security monitoring, penetration testing, vulnerability scanning |
Testing & Quality Assurance | Testing tools, devices, automated testing services |
Customer Support | Helpdesk software, support agents, live chat, call systems |
Product Operations | Application monitoring, logging, uptime monitoring |
App Store & Distribution | Apple Developer Program, Google Play, software distribution |
Depreciation & Amortization | Depreciation of equipment and amortization of qualifying software assets |
When setting up the categories in your accounting software or Excel budget:
Capital expenditure: Laptops, servers, and certain software development costs may need to be recorded as assets rather than immediately expensed.
Payroll deductions: Employee PAYE, NIS, and other withheld amounts are generally liabilities to remit, not additional company expenses. Employer contributions are expenses.
GCT: Recoverable input GCT is generally tracked separately from expenses.
Loan repayments: Loan principal repayments reduce liabilities, while interest is generally recorded as an expense.
Product profitability: Track expenses by product, project, or client in addition to expense category.
My recommendation for Osoobe: Use the 10 main budget groups above, with the detailed categories as subcategories. Add a Cost Centre field for each expense, such as Client Projects, Internal Products, or General Operations.
This will help you track not only how much the company spends each month, but also which clients, projects, and software products generate enough revenue to cover their costs.
Example:
https://chatgpt.com/s/t_6ad30b6f23948191a299312ecf02b402