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Project and company expenses

Expenses accompany all work processes of the company as a whole and individual projects. Starting from essential investments in equipment to small payments for the Internet, telephone, or licenses for the software you use.

It is common to use the terminology CapEx and OpEx when dividing costs into two conventional groups.

Let's look at these abbreviations and how to track them properly.

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CapEx vs. OpEx

So, what is the difference between expenses, and how to understand which of your expenses fit into specific categories?

CapEx is a capital investment. That is the purchase of significant goods or services that will bring you profit in the future. It is a global high-cost expense. For example:

  • Office buildings, including the costs that extend the life of the building
  • Office equipment like computers, photocopiers, furniture
  • Vehicles
  • Patents, licenses, trademarks, copyrights

In IT, such expenses are incurred mainly by businesses already firmly on their feet. This is because small companies mostly choose to rent rather than buy offices. Not server versions of software, but cloud technologies that do not require the purchase of equipment, etc.

OpEx is an operating expense. It is the money that businesses spend on a regular basis to perform daily operations. For example:

  • Office rent
  • Utilities
  • Salaries and wages
  • License fees
  • Marketing expenses

Most of us face this type of expense. But there are nuances in the accounting itself. Accounting regulations determine the classification of an item as CapEx (Capital Expenditure) or OpEx (Operating Expense). For instance, if a company leases equipment, the lease cost would typically be categorized as an operating expense. On the other hand, if the company buys the equipment outright, it would likely be considered a capital expenditure and be capitalized on the balance sheet.

In short, here is a small infographic. Keep it for yourself as a cheat sheet:

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Tracking expenses in Cost Tracker

So, how to track expenses in Jira? Let's leave our Spreadsheets alone and try to organize expense accounting more clearly and efficiently.

The Cost Tracker for Jira Cloud app allows you to make informative cost and time reports, calculate salaries, get the information needed for invoices, etc. It also allows you to keep track of expenses.

You can enter one-time and recurring expenses. It is also possible to connect them to specific entities - projects, people, tasks, etc.

An example of entered expenses:

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You can also view the cost schedule by generating a cost report. They are displayed cumulatively, i.e., they are summed up every month so that you understand the amount of expenses in general for a certain period.

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All expenses require careful accounting. Why not do it in Jira? With Cost Tracker, you can keep constant records + set up recurring expenses. You can also see how certain expenses affect the total cost of projects. This will allow you to analyze and draw conclusions to minimize certain costs that may not be necessary.

So, here's a 30-day trial to get acquainted with the app in full. The add-on is free for teams of up to 10 users. 

Have good cost accounting and good profits! πŸ™‚

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