Overhead costs are the ongoing expenses of operating a business that cannot be directly attributed to a specific product or service. They include items such as rent, utilities, insurance, and other costs required to maintain overall business operations. These are essential expenses for running a business but do not generate income directly.
Key Benefits
– Cost Control: Identifying and managing overhead helps reduce unnecessary expenses.
– Profitability Insight: Understanding overhead allocation supports accurate product pricing and profitability analysis.
– Budgeting Accuracy: Enables more precise forecasting and budgeting for future operations.
Related Terms
– Cost Control: Identifying and managing overhead helps reduce unnecessary expenses.
– Profitability Insight: Understanding overhead allocation supports accurate product pricing and profitability analysis.
– Budgeting Accuracy: Enables more precise forecasting and budgeting for future operations.
References
For further insights into these processes, explore Zycus’ dedicated resources related to Overhead Costs:
- Mastering Indirect Spend Five keys to Success
- Procurement Office Hours by Zycus
- Top 5 Accounts Payable Best Practices for Efficiency and Cost Savings
- Cost Optimization Secrets: Strategic Sourcing and Vendor Management Realign Costs and Protect Revenues
- Control Supplier Risk and Stay Ahead with Zycus iRisk
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Maverick spending—also referred to as maverick buying, occurs when employees make purchases outside approved procurement processes, policies, or supplier contracts.
