Expense or profit center?

One of the problems with working with a strict budget is the difficulty in distinguishing between an expense and a profit center.

Is a piece of software that costs $300 and helps you generate an additional $5000 an expense or a profit center?

Does a salesperson who costs $75,000 but generates $150,000 in profit an expense or a profit center?

Admittedly profit centers don’t always pay off and sometimes there is a lag in time but it’s important when looking at ‘expenses’ to know whether they will cost you money or save you money.

Have a great day!

Lawrence

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