Expenses correspond to amounts spent to attain the objectives of the Folio such as rents, maintenance contracts, software license purchases, loan financing costs or mortgages. They can belong to any of the three standard Categories: OPEX, CAPEX or FINEX. Expenses can be single occurrence, or they can be recurrent. Recurrent expenses can also be amortized; in which case the amount associated with the payment will be evenly split on the payment period.

Categories

FOLIO uses a classic categorization of expenses to better structure your budget. Every expense planned in a budget belongs to one of three main categories: Operational expenditures (OPEX), Capital expenditures (CAPEX) or Financial expenditures (FINEX). Each of these categories will be shown only if it holds at least one expense in it for a given budget. Once a category is displayed on screen, you can collapse it or expand it by clicking on the triangle icon ( ) next to the category name.

You should classify expenses in their appropriate category so that you can later get relevant information about the categories themselves, like the total planned cost for all capital expenses.

Operational expenditures (OPEX)

Operational expenditures are all non-capital expenses incurred during normal operation. They are the day-to-day expenses required during the execution of a project, such as the salaries, rent, insurance, electricity, and computer maintenance contracts. They do not include physical assets or loan financing for example. All positions added to a budget are automatically added to the OPEX category.

Capital expenditures (CAPEX)

Capital expenditures are used by an organization to acquire or upgrade physical assets with a useful life extending beyond the taxable year. Examples of capital expenses are purchase of a computer, photocopier or building.

Financial expenditures (FINEX)

Financial expenditures are usually interest expenses, such as loan financing, credit card interest, etc.

Expense recurrence

Expense can be defined to be recurrent using the Recurrence dialog that appears when clicking the edit link of the Recurring field in the various edition dialogs. See Recurrence for more information.

Recurrent expenses can be amortized in which case their payments will be evenly spread upon their recurrence period. For instance, a monthly amortized expense of 1,200$ that is defined to recur for 1 year will result in 12 payments of 100$ each occurring once a month. See the Expense Cost Calculation section below for more examples on amortized expenses.

Expenditures and Folio's Time Frame

Expenditures and revenues can be defined to occur outside of a Folio's time frame. Consequently, you can specify:

An expense or revenue occurring before or after the Folio's start and end date.
A recurrent expense or revenue to start outside the Folio's time frame with an end date inside the time frame.
A recurrent expense or revenue to start inside the Folio's time frame with an end date outside the time frame.
A recurrent expense or revenue to start outside of the Folio's time frame with an end date after the end of the Folio.

In any of the above situations, a warning indicator will be displayed next to the expenditure or revenue name and in the detailed panel when the item is selected. Note that only the payment occurrences that happen inside the Folio's time frame are taken into account when calculating costs and revenues at a given date. Changing the start date or end date of a Folio can thus affect the number of payments included in calculations. Note also that if the Estimated date of completion of the Folio is later than the planned end date, then the payments occurring after the planned end date will appear in the forecast graph.

Expense costs

The cost of an expense is calculated by multiplying its payment amount by the number of payments.

Cost = Number of payments x Payment amount

The number of payments depends on the recurrence definition for that expense and the Folio's time frame. Only payments occurring (inclusively) between the Folio's start and end dates (see Folio Configuration) are taken into account.

Note also that non-working dates are not taken into account (e.g. a rent payment won't be skipped if the incurrence date is a holiday).

Example 1 - Recurrent expense

Amount: 100$

Cost	4 x 100$ = 400$
Recurrence definition	Monthly on day 1, from 1/Feb/2014
Folio time frame	1/Jan/2014 to 1/May/2014
Number of payments	4 (February 1st, March 1st, April 1st and May 1st)
Payment amount	100$

Example 2 - Amortized expense

Amount: 100$ (amortized)

Cost	4 x 25$ = 100$
Recurrence definition	Monthly on day 1, from 1/Feb/2014
Folio time frame	1/Jan/2014 to 1/May/2014
Number of payments	4 (February 1st, March 1st, April 1st and May 1st)
Payment amount	100$ / 4 = 25$

On this page:

Related pages:

- Planned Costs
- Actual Costs

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