Menu
By office supplies expense, we mean that the amount of office supplies that are used in an office or a small business is charged as an expense and should always be included in every reporting period each year. All office supplies are considered as a business expense for as long as they relate to your business. Some of these items that are included in the accounting are: paper, pens, pencils, desk supplies, light bulbs, office forms, toner or printer cartridges, and even the refreshments and other items used that are offered to the clients such as coffee, coffee pot, cups, glasses, etc. are also part of the expenses.
Office supplies are considered as part of an office expense if they are used to execute tasks or activities within the business that are outside of shipping or manufacturing though the supplies used to ship products to clients like carton, shrink wrap, tape, and the like may also be considered as an office expense.
The cost of office supplies that are currently on hand by the end of an accounting period should be the balance in a current asset account that is labeled “Supplies”, while the cost of the supplies that are used up during an accounting period should be written in the income statement account under “Supplies Expense”. At the end of this period, the balance in the account needs to be adjusted and recorded. Every time office supplies are bought, the expenses incurred will be debited to “Supplies”.
Maintaining and repairing office equipment is part of immediate expenses, and if a large amount is used to improve office equipment, expenses that are part of this enhancement will be recorded as an asset then the depreciated value of the remaining life of the certain office equipment will also be noted.
Some of the biggest office supply expenses are related to printing though it may not be obvious. These types of office expenses that usually go unnoticed are: paper stock varieties and toner or ink cartridges. For a small business to save on office expenses, it would be wise to use a separate account for the printing needs.
There are ways to keep your business’ printing supplies at bay. One is to closely monitor the supplies and its usage and another is by getting a cheaper version of the same kind of cartridge. But since everyone is busy fulfilling their roles in the office, no one probably has the time to deal with this aspect
To solve this problem, your business could consider a print service program in which software will be installed on the office computer and it will be the one to monitor the toner, print usage, and detect malfunctions or issues.
Having this kind of program in your business will definitely cut off some office expenses and give you some savings. If you are a small business in Canada, making write-offs for small businesses in Canada can also help you lessen your business’ income tax and tax payable which then lessens your office expenses as well.
What is great about this program is that you do not need extra equipment because you only need a software to make this work and you also save a lot of time. As mentioned, it will track your toner usage so if your cartridges are getting low, new ones will be shipped to your office automatically.
At the end of each month, you will also receive a report of how the supplies were used, and this piece of information can be valuable as you can find out if there are abusers. Through this, you can address the issue by implementing policies on how employees should use the office supplies (especially paper) properly.
By monitoring your office expenses specifically your office supplies, you need some historical data such as a few months or a year’s worth of office supplies purchases to find out how much of your monthly business expenses go in this area. You can use this information to create an accurate plan and budget.
To make more savings in your office expenses, it is necessary that you constantly monitor and reevaluate the usage and costs every month because needs and prices change. Use your past data and use it as a reference for the new ones to track your office expenses effectively.
For small business tax deductions Canada, include in your tax return the number of your office expenses and maybe some vital equipment to get some small business tax deduction Canada. Leverage your office expenses and include them in your tax return every year.
Harness the power of your commercial property and keep what’s yours.
With over 20 years of cost reduction and tax analysis experience, our team of Engineers, IP Attorneys, Senior Tax Consultants, and Service Specialists can determine quickly and accurately how to increase your cash flow and reduce expenses.
Copyright 2023 The Bottom Line Group LLC. All right reserved.
Follow Us