Miscellaneous Expenses: Definition, Examples & Best Practices

While miscellaneous expenses might seem inconsequential at first, without a good management system, they can add up quickly and become a real drain on your bottom line.

In this article, we help you identify the miscellaneous expenses in your business and discuss a set of best practices that can help you keep them under control.

Key Takeaways

1. Miscellaneous expenses are the unpredictable costs that your business incurs which are not significant or consistent enough to warrant their own dedicated expense category. Examples include marketing and promotional items, minor repairs and maintenance, small and irregular T&E costs, training and education, office supplies, and employee perks.
2. Keeping track of miscellaneous expenses is important because they can quickly add up and become a drain on your bottom line. In addition, miscellaneous expenses are often tax deductible, so, if you’re not keeping an eye on them, you could be leaving money on the table come April 15.
3. To manage miscellaneous expenses, create a dedicated category in your accounting system for these small costs. Then, set a budget for the category and collect receipts so you know what your business is spending.

What Are Miscellaneous Expenses?

Most business costs fall neatly into well-defined categories like salaries, rent, and fuel. But businesses also incur other expenses that are more difficult to categorize. These are what’s known as miscellaneous expenses.

While miscellaneous expenses can encompass a wide array of items and services, they all typically exhibit the following characteristics:

• Irregular: In contrast to recurring expenses like utility bills, miscellaneous expenses will often occur sporadically and without a predictable pattern.
• Low dollar value: Most miscellaneous expenses are relatively inexpensive and don’t stand out on a list of costs. However, over time, miscellaneous expenses can accumulate to become a high-dollar-value category all their own.
• Necessary: Despite their irregular nature and low dollar value, miscellaneous expenses are often necessary to keep the business running smoothly, though they’re not part of the core operation.

Miscellaneous expenses lie in sharp contrast to categorized business expenses which are predictable, regular, and recurring.

Why Is It Important To Track Miscellaneous Expenses?

At first, miscellaneous expenses may not seem that important — the $50 you spend for an employee appreciation meal doesn’t even register as a blip on your financial radar. But imagine that you spent $50 every week for an entire year. That’s more than $2500!

Without proper tracking and control, those small expenses can quickly add up and become a very large expense that starts to affect budgeting and spending in other parts of your business.

What’s more, many miscellaneous expenses are tax-deductible. So, if you’re not tracking them, you’re leaving money on the table come April 15.

And, because they are irregular and of relatively low dollar value, staying on top of the recordkeeping can be a pain if you don’t use the right tools (e.g., software and automation).

Examples Of Miscellaneous Expenses

As we mentioned earlier, miscellaneous expenses can be remarkably diverse and hard to identify. To help you recognize them when they happen, here are examples of potential miscellaneous expenses your business may incur.

Office and administration: Non-standard or urgent shipping, subscriptions, memberships, bank charges (e.g., overdraft charges or fees for specific banking services), legal fees, accounting fees, permits, licenses, employee birthday gifts/work anniversaries, team lunches, supplies for the break room

Marketing and sales: Small, one-time purchases of branded merchandise, trade show or conference giveaways, small advertising costs, client entertainment

Technology and IT: Software licenses, small tech accessories (cables, adapters, etc.), minor IT repairs

Travel and hospitality: Tolls, parking fees, small meal expenses, baggage fees, Wi-Fi charges, other small and irregular T&E expenses

Operational expenses: Uniforms, PPE, job posting fees, background checks, small equipment and tools

Keep in mind that this is not an exhaustive list of miscellaneous expenses. In addition, it’s important to understand that a miscellaneous expense for one business may not be a miscellaneous expense for another business.

For a small startup, the purchase of a new large-format printer might be a significant capital expenditure, while, for a large corporation, the same purchase could be classified as a miscellaneous office expense.

If you’re unsure how to classify an expense, talk to an accountant who is familiar with the type of business you run and the tax laws that apply.

Best Practices For Managing Miscellaneous Expenses

Create A Dedicated Category For Miscellaneous Expenses

One of the first things you can do to make managing miscellaneous expenses easier is to create a dedicated category in your accounting system where all these charges can live. Doing so provides a central location for tracking and analysis and provides transparency.

It can also be beneficial to create subcategories within the miscellaneous category for more granular tracking. This isn’t absolutely necessary, but it can help you identify when a certain type of spending has grown enough to deserve its own category in your accounting process.

Set A Budget For Miscellaneous Expenses

With a miscellaneous expenses category in place, you’ll be able to see exactly what your business is spending for these unpredictable and irregular goods and services.

The next thing you’ll want to do is analyze your spending and set a budget. This helps you limit the spending in this category so that it doesn’t become a drain on other necessary parts of your business.

Even with the best planning, inventory, and supply, technicians who work outside the office are going to need to purchase items to get the job done, including:

• Fuel
• Vehicle maintenance
• Materials and supplies
• Trip costs, such as lodging and meals

For most businesses, these field expenses can be classified as miscellaneous expenses and need to be monitored and controlled.

For more information on creating an efficient and effective program to keep these costs in check, take a few minutes to read this article from the Coast blog: Mastering Fleet Finances: The Difference Between Back Office and Field Spend.

Collect Receipts And Other Documentation

Regardless of whether you dedicate a category to your miscellaneous expenses or set a budget to help monitor spending, you will absolutely need to collect receipts and other proofs of purchase.

This kind of documentation may include:

• Itemized receipts and invoices
• Credit card and bank statements
• Itineraries
• Packing slips
• Canceled checks

It can also be helpful to include notes that explain the business purpose of the expenditure for future reference. All of these types of records can be crucial for both internal recordkeeping and tax compliance.

Establish A Threshold For Reclassification

Define criteria for when a miscellaneous expense should be moved into its own dedicated expense category (i.e., out of the miscellaneous category).

Criteria may include frequency of purchase, total amount spent (per week, month, quarter, or year), planned growth, or some other variable that impacts the way you do business.

Automate The Tracking Process

When it comes to tracking, managing, and controlling miscellaneous expenses, automation is key.

The right software and spend-management platform gives you access to tools like transaction notification, automated expense approval, policy enforcement, and automated receipt capture.

In some cases, you can even take advantage of automatic expense categorization, real-time reporting, double-entry alerts, and reminders for you and your employees.

Take Control Of Your Miscellaneous Expenses With Coast

Miscellaneous expenses may seem minor on their own, but they can quietly add up to major headaches, especially when they fall outside of standard categories or slip through traditional approval processes.

Coast gives fleet businesses the tools to bring order to the chaos, making it easy to manage ad-hoc spending without sacrificing control or visibility.

Whether it’s a driver buying safety gear, a field supervisor covering parking, or an office manager handling last-minute purchases, Coast lets you empower your team while keeping every dollar accounted for.

Here’s how Coast helps manage miscellaneous expenses with confidence:

• Flexible, rule-based cards: Issue cards with custom spend controls, so employees can handle the unexpected without going off-policy.
• Manage exceptions effortlessly: Coast gives employees the ability to request one-off exceptions outside of the regular spend policies. Admins simply approve the transaction in real-time from their phone.
• Instant visibility: See every transaction in real time, even when it falls outside standard categories.
  Receipt collection made easy: Employees get a text or app prompt to upload receipts immediately, reducing follow-up and improving compliance.
• Streamlined reconciliation: With clear categorization and notes captured at the point of purchase, you spend less time untangling unclear charges.

Coast gives you a smarter way to handle the “everything else” in your budget. It’s control without complexity, for every purchase that keeps your business running.

To learn more about how Coast can benefit your businesses, visit CoastPay.com today.