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Business Expense Categories: Simple List for Bookkeeping

What categories should I use for business expenses?

Use business expense categories that match how money actually flows through your company and how you’ll report it at tax time. The goal is simple: keep records consistent so you can see where profits come from, spot overspending quickly, and hand clean reports to your bookkeeper or tax pro.

Core expense categories most businesses need

Start with a practical set that works for service businesses, online sellers, and local shops:

Cost of Goods Sold (COGS): Inventory, product materials, packaging, and direct production costs.
Advertising & Marketing: Paid ads, influencer fees, email tools, print materials, promotions.
Office Supplies & Equipment: Small supplies, printers, desks, and other day-to-day items.
Software & Subscriptions: E-commerce platforms, accounting tools, apps, memberships.
Professional Services: Legal, accounting, consulting, and outsourced specialists.
Contract Labor/Freelancers: Non-employee labor and project-based help.
Payroll (if applicable): Wages, payroll taxes, and employee benefits.
Rent & Utilities: Office/warehouse rent, internet, phone, electricity.
Shipping, Postage & Delivery: Carrier fees, labels, fulfillment charges.
Travel: Flights, lodging, rideshares, and business transportation.
Meals: Business meals (tracked separately from travel for easier reporting).
Vehicle Expenses: Fuel, maintenance, or mileage-based tracking (pick one method and stay consistent).
Insurance: General liability, professional liability, property coverage.
Bank Fees & Interest: Merchant fees, loan interest, account charges.
Taxes & Licenses: Local permits, business registrations, non-income taxes.

How to choose the “right” set for your books

Keep categories broad enough to avoid constant reclassifying, but specific enough to answer real questions (for example, separating “Advertising” from “Software”). If you sell products, keep COGS clean so gross margin is accurate. For a deeper breakdown and examples, see the full guide here: What categories should I use for business expenses?

For Business Expense Categories: Simple List for Bookkeeping, the best answer depends on fit, material, care instructions, and how the product will be used day to day.

FAQ

How do I separate personal and business expenses?

Use a dedicated business checking account and business credit card, then pay yourself via an owner draw or payroll. If something is mixed, document the business portion immediately and store the receipt with a clear note.