Any organization that contracts outsourced services must consider the extra administrative cost, since it is necessary to monitor compliance with the contractor’s obligations. Although it is not a tax expense, it must be taken into account when designing business strategies.
Another important point is the analysis of sectors that already use outsourced services. After all, there are cases where rules have already been established regarding the values and type of collection. In the next topic, we’ll look at more details on taxes in different segments.
Direct expenses or costs
These are directly related to the costs that are made to produce, that is, the raw material, maintenance of machinery, energy, property, employees. These resources are essential for production and therefore are direct because they are required to produce. The important for the calculate sales tax is there as well.
Indirect expenses or costs
Indirect expenses are essential for production, but are not directly related to the factors used, that is, the costs incurred for their production (administrative expenses).
Differences between direct and indirect
Types of specific expenses
The expenses can be varied and there are several implications, for example the specific expenses are not the same for a start-up company as for a company with several years in the market. Specific expenses are more specific in relation to the activities and areas of the company.
Administrative expenses: Includes payroll , office rental, external service fee (legal or tax, accounting). Telephone service, maintenance of office equipment, stationery, advertising, others.
Financial expenses: Contains the expenses related to the company’s tax obligations .
Production expenses: Raw material, labor, machinery, consulting and training.
Sales expenses: Postal services, storage of articles, promotional items, others.
Distribution expenses: Packaging expenses, distribution of articles, transportation, storage, others.
In the following image you will see a diagram where I explain how if we add the Production Costs (general) and the Business Expenses (specific), the result is the total cost of the production processes of our company.
What is an Expense Control?
Having a good control of expenses will help you to establish a daily control of the income and expenses (expenses) of your company in order to know the daily profits or losses.
On the other hand, it supports the realization of a budget plan to improve the company in different areas (administrative, production, distribution, storage, transportation, etc.).
What are the characteristics of taxes in different market segments?
Each market segment has peculiarities with regard to taxation. Therefore, it is important to know the tax characteristics of the different types of services that your company can outsource. The options are open in this case and so for tax submissions you better be specific.