Total expenditure - financial phenomena defined as funds outlay, which may occur in the form of (Kahn A. 2002, s.39):
- cash turnover derived from checkout,
- cashless turnover from bank account.
Expenditures might be understood as the use of own funds for materials or products purchase as well as the payment for usage for service of other companies. It should be remembered, that not all of the expenditures make a cost for enterprise i.e. loan repayment. Nevertheless, each cost entail expenditure (Kahn A. 2002, s.39).
The expenditures might be divided into (Busatto L.M., 2011, s.7-8):
- expenditures which not comprise costs – expenditures are not connected with defray of commitment which base forms legal regulation as well as financial or lending activities.
- expenditures which comprise costs – expenditures destined for defray of commitment arisen via machines and devices serving for production purchase, which during its wear pose a cost.
According to expenditures which comprise costs, we can distinguish following situations in view of time criterion (Shah A. 2005, s.39):
- expenditure transpire before cost – i.e. materials for production purchase,
- expenditure transpire after cost – i.e. payment for materials raddled in production,
- expenditure at the same time as cost – i.e. salaries payment.
Expenditures and cash flow
The next division of expenditures relies on calculation of cash flow. In this group we can distinguish (National Council of Educational Research and Training 2013, s. 247):
- operational expenditures – i.e. salaries,
- financial expenditures – i.e. interest rate from bank loan,
- capital expenditures – i.e. machines purchase.
- Bai A. (2015). The Impact of Economic Parameters on Government Total Expenditure in 5 Richest Countries, Australian Journal of Masic and Applied Sciences, 9(6) Special, Australia.
- Busatto L. M. (2011). The quality of public expenditure and its influence on economic growth: evidences from the State of Rio Grande do Sul, Minerva Program, Washington, s. 7-8.
- Kahn A. (2002). Budget Theory in the Public Sector, Quorum Books, Westport, Connecticut, s. 39.
- National Council of Educational Research and Training (2013). Accountancy: Company Accounts and Analysis of Financial Statements, Central Board of Secondary Education, New Delhi, s. 247.
- Pattanayak S. (2016). Expenditure Control: Key Features, Stages, and Actors, International Monetary Fund, Washington.
- Potter B.H. (2000). Guidelines for Public Expenditure Management, International Monetary Fund, Washington.
- Schick A. (1999). A Contemporary Approach to Public Expenditure Management, World Bank Institute, Washington.
- Shah A. (2005). Public Expenditure Analysis, The World Bank, Washington, s.39.
Author: Justyna Zalewska