What is an expense?

The definition of expense is the disbursement in the form of money that has as a counterpart a contraprestación in goods or service. At the moment in which the spending takes place, a double economic circulation is produced at the same time, since on one side the money leaves and on the other services or goods enter, through which it will be possible to obtain income from economic activity .

It is an outflow of money that is not recoverable unlike the coste, which it is, since the capital outflow is made with the aim of making a profit. In the business field, the meaning of expense is the item that reduces the profit of the company or, failing that, increases the loss or debt.

At all times the expense will involve the disbursement of money, which can be in cash or through another payment system. In return, you will always have a return. An expense, for example, might be paying the telephone bill, consulting a consultant, or buying furniture.

In many cases, the terms expense and payment are often confused. However, an expense does not mean that the payment is made at the same moment, so there will not always be a coincidence in time.

The expense concept implies obtaining a consideration. However, the payment of this consideration will be made when the money leaves the company's coffers.

In addition, the concept investment is also often mistakenly used as a synonym for expenditure, which is the implementation of the different resources with which it is expected to achieve income, a profitability. In a purchase, an expense is defined as that which is oriented towards consumption, compared to the rest, which acquires the rank of asset or investment.

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