Small Business and Business Software

Average Office Supplies Cost For A Small Business

Average Office Supplies Cost For A Small Business – Operating expenses (OPEX) and cost of goods sold (COGS) are separate sets of costs that businesses incur while conducting day-to-day operations. As a result, their values ​​are recorded as separate line items on the company’s income statement. But both expenses are deducted from the total sales or revenue of the company.

Business expenses refer to expenses that are not directly related to the production of goods or services. Typically, selling, general, and administrative (PS&A) expenses are separated as a separate line item in this category. Examples of operating expenses include:

Average Office Supplies Cost For A Small Business

Average Office Supplies Cost For A Small Business

A company needs to plan its operating expenses wisely while maintaining its competitive advantage. Ultimately, these costs are regardless of sales numbers. For example, a donut shop must continue to pay rent, utilities, and marketing expenses no matter how many French fries it moves in a given week.

Cost Of Goods Sold (cogs) Explained With Methods To Calculate It

Cost of goods sold refers to business expenses directly related to the production and sale of the company’s goods and services. Simply put: COGS represents the costs directly incurred when a transaction takes place. When a coffee shop sells a double espresso, COGS takes into account the cost of the to-go cup, protective wrapper, coffee filter, water, processed beans, etc. Examples of COGS include:

Interestingly, employee salaries can be classified into any type of expense depending on the specific type of work involved. Office salaries of secretaries, accountants, marketing specialists and administrative staff are classified as business expenses. However, an automotive assembly line worker’s salary will be directly related to production and will be classified as cost of goods sold.

If it’s not clear whether an expense falls under COGS or not, simply ask, “Would this expense occur even if there were no sales?” If the answer is yes, the expense is not part of COGS. For example, in a warehouse full of goods, COGS includes the money spent to create the goods and transport them to the warehouse. Conversely, the costs of maintaining that warehouse, rent, and utilities are operating expenses.

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If you’re budgeting for a new startup or trying to cut costs, it pays to know how much you can expect to spend on your office supplies month-to-month. Make sure you are comparing similar items. Office supplies are consumables that workers regularly use to conduct business, such as paper, pens, staples, and common items such as printer ink. Office expenses include office supplies, but also include other expenses such as rent, equipment, and furniture.

Supplies are a monthly expense, as office expenses must be recouped when the amount of each is low. You might be surprised how much these office expenses add up.

Average Office Supplies Cost For A Small Business

Of course, the bigger your business, the more you will spend on office supplies. So knowing how much big corporations spend on office supplies won’t help you much. It makes more sense to discuss how much companies your size spend on office supplies

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. However, the more employees a company has, the less it costs per employee, although they typically spend more on office supplies than a smaller company would.

In a 2014 OPI.net article titled “United Stationers: Office Supplement Consumption by Company Size,” author Jack Francis stated: Businesses with one to four employees spend $1,844 per employee on office supplies, about 50 to 60 percent of which is office consumables. Supplies like paper, pens and computer ink.

Therefore, the amount these small businesses spent on office supplies per employee ranged from $922 to $1,106 per year, or $77 to $92 per month. Performing similar calculations for other company sizes reveals that:

In a 2018 article by Natalia Berdzeny, executive vice president of spend management services at LAC Group, which helps companies track spending, Berdzeny said her clients spend an average of $200 per employee per year, or $17 per month, on office supplies. Heavy users of paper, such as law firms, spend an average of $1,000 per year, or $83 per employee per month.

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In 2018, many businesses may spend less on supplies like paper and pen as these businesses migrate more of their information to digital formats. They can email documents to colleagues and clients without printing them. Don’t print hard copies if recipients don’t need them. However, law firms still do a lot of printing to keep hard copies of legal documents in their files and to officially transmit documents to clients or on behalf of their clients for litigation.

First, make sure you get all the discounts you can from the seller. By buying from one or two sellers, you can take advantage of volume discounts. You can get to know their company representatives better and ask them about deals or ways to help you cut costs. Buying as many items as possible on contract gives you the lowest prices for the items you use most frequently.

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Beware of sellers who start with a low contract price to get your business, then gradually increase it and hope you don’t notice. Some retailers will provide an analysis of your buying trends and spending so you can manage your inventory more effectively.

Average Office Supplies Cost For A Small Business

Second, let the entire company know that you are making a conscious effort to reduce spending on office supplies and that you are asking for their help in doing so.

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Most employees do not knowingly steal office supplies. They’re likely to grab a few extras in their rush to get the job done on time, so they don’t have to come back for more. By providing a subtle reminder in the room, your employees can print as little as a key table from a 12-page document, or pick up a pen or two instead of a handful.

As a last resort, if your supplies seem to be flying off the shelves as soon as you restock them, the Staples website suggests keeping them locked up so your employees can ask for what they need. Few would have the courage to ask for five pads or a box of pens, and if so, the person in charge would naturally ask why so many items were needed.

The downside of this approach is that the keyholder has to interrupt their work every time someone needs the item. Make sure to have multiple people’s keys in case the other key holder is not available. You will hear many complaints about this method. It takes up everyone’s time and makes people feel like you don’t trust them.

If you try this, let everyone know that this system only lasts until the company figures out where the inventory is going and how much of each item you actually need.

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Barbara Bean-Mellinger is a freelance writer living in the Washington, DC area. She has written on business topics for bizfluent.com, afkinsider.com, Harbor Style Magazine, the Charlotte Sun, and others. Barbara received a B.S. The University of Pittsburgh has received several awards in the field of B2B and B2C Marketing.

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On this page you’ll find many useful small business budget templates, including a simple small business budget template and a business budget template. Also, find out

Average Office Supplies Cost For A Small Business

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