Operating expenses (OPEX)
Operating expenses (OPEX) are the day‑to‑day costs of running your business. They are the regular expenses needed to keep operations going and are recorded in your profit and loss for the period they relate to, not as assets. OPEX is different from capital expenditure (CAPEX), which creates or improves long‑term assets.
What usually counts as OPEX vs. what usually doesn’t:
- OPEX: rent, utilities, wages and salaries, software subscriptions, marketing, insurance, office supplies, routine repairs and maintenance.
- Not OPEX (usually CAPEX): buying equipment or vehicles, major fit‑outs, significant upgrades or refurbishments.
Simple example
Monthly rent, broadband and a software subscription are OPEX. Buying a new delivery van is not OPEX; it is capital spending.
Clear categorisation makes budgeting and pricing easier. Keep OPEX separate from one‑off investments to see your true running costs and cash needs.
