How expenses affect profit

Expenses are costs. In Bizwazi, expenses reduce profit because profit is based on sales minus expenses. Recording expenses properly helps you see whether the business is actually making money.

Simple profit idea

• Sales bring money into the business.
• Expenses take money out of the business.
• Profit is what is left after expenses are considered.
• If sales are high but expenses are also high, profit may still be low or negative.

Why expense recording matters

• Without expenses, profit can look better than it really is.
• Rent, wages, stock, transport, repairs, utilities, and fees all reduce real business profit.
• Small regular costs can become large over a month.
• Recording expenses daily gives a more honest picture.

Where you see the effect

• Dashboard profit figures.
• Reports Centre daily, weekly, monthly, and yearly reports.
• Profit performance cards.
• Month forecasts.
• Business decision checks.