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Operating Expenditure

Operating expenditure is the recurring cost of operating a business day-to-day. Operating expenditure is a necessary and unavoidable part of operating a business. Operating expenditures typically include rent, payroll, insurance, and most ongoing or chronic costs.

Business managers must continually manage costs such that operating expenditure remains as low as possible, without compromising the integrity of the business. The IRS allows businesses to deduct operating costs if the business operates to earn a profit.