What Are Sundry Expenses?

Handling regular business expenses can be challenging enough. However, when it comes to the expenditures you can’t place into any general category, recording them becomes even more complicated.

Fortunately, these miscellaneous expenses can still fit into one category called sundry expenses. If you are wondering what sundry expenses are, you can find out by reading this article. Let’s take a look!

What Are Sundry Expenses?

Sundry expenses, or sundries, include all the small, irregular, and infrequent expenses that can’t fit into any other expense category.

This is because their individual costs are so small that you probably can’t even decide which income statement line applies to them. What expenses will end up being sundries depends on several factors, including the industry you are working in, or statement forms.

For example, if you don’t have a line on your statement for recording a specific type of cost that hasn’t occurred before, this might be listed as a sundry expense.

If you are conducting a transaction through a bank different from what you regularly use for your transactions and are charged a transaction fee, this will also become a sundry expense. In both cases, the expense is made infrequently and in small increments.

The size of your company may also affect which expenses can be recorded as sundries. For a small business, even a $50 travel ticket can be a significant amount that needs to be recorded under its own line on the ledger. A large corporation will deem the same expense as a sundry because they consider it too small to have its individual tab.

The Difference between Sundries and General Expenses

The main difference between sundries and regular expenses can be found in their nature. While sundry expenses can’t be classified as regular expenditures, general expenses usually have their own dedicated account they easily fit in.

The latter also has a predictable timing, unlike the sundries, which occur in irregular intervals. These can also involve one-time payments like transaction fees, donations and gifts.

General expenses are typically wages, employee benefits and salaries, costs of raw materials, department costs, and marketing expenses. These are also more likely to be larger sums of money used for company investments or other frequent expenses.

General expenses are expenses of higher significance simply because they make up the bulk of a business’s expenses. Since they make up only a small percent of the company expenditures, sundries are not as noteworthy on their own.

Example and Characteristics

One of the crucial characteristics of sundry expenses is their rarity. They don’t occur often, and they can’t even be predicted. As mentioned before, sundries are infrequent payments, so it isn’t worth the hassle of adding a separate line for them in your accounting. Their unusual nature also makes them harder to handle.

Here are a couple of examples of miscellaneous expenses that can be considered sundries:

·   Transaction and other bank service fees are charged for one-time or infrequent transfers.

·   A box of replacement labels for an inventory shipment you only need when the old ones fade, which takes a long time.

·   Donations and gifts to charities and other non-profit organisations.

·   Flowers, decorations and other non-edible items purchased for a worker’s retirement party or hospital stay.

As you can see, none of these expenses can be predicted, nor can they be registered in the regular accounts. They also occur relatively rarely, but they still have to be recorded – and the sundry account is the best place to do so.

How to Record Sundry Expenses in Accounting

Individual sundry expenses will probably seem insignificant on your balance sheet. However, when added together, these payments can add up to a significant expense. They can even leave their mark on your net worth and tax liabilities.

To avoid this, you should always record all sundry expenses. The best time to record sundries is when you are drawing up your ledger, profit or loss account.

For small companies, this only means noting down a single line under the other expense categories. Large brands typically create a dedicated sundry account to help them track these miscellaneous costs.

The steps of recording sundry expenses vary depending on several factors. Whether you do this, or your accountant does, by listing them as sundries ahead, you can save time on trying to place each random expense into a general account.

You can hire an in-house accountant or outsource the job of recording the sundries. This makes it easier to deal with all your accounts and saves your business time and money.

Using accounting software is another straightforward way to keep track of your expenses, including the sundries. Set up a sundry account tab to track these seemingly insignificant costs. However, if you use these types of programs, you may have no control over how the financial statements are named.

For example, some software will only allow your list items as miscellaneous, and there is no option for creating a new line for a few sundries.

That being said, the nature of sundries can change over time, so you should also pay attention to them. Payments that were insignificant on their own before may become significant enough to deserve their own line.

Make sure to go over your accounts from time to time. This will help you identify new patterns born from small irregular charges. If you notice certain types of payments pop up more and more frequently and with improved regularity, these will no longer be sundries. In this case, creating a new account is in order.

Final Thoughts

Sundries are random, typically one-time expenses you can’t record into any other category. Unlike regular expenses, these don’t occur in fixed intervals and can be made of several nominal expenses, sometimes recorded as gifts, donations, or other small one-time fees.

Apart from being rare and irregular sundries are also unusual, which makes recording them even more challenging.

Small businesses typically don’t have this problem as they can probably list them as a single line item under expenses. Larger companies, on the other hand, will need to create a designated account for sundries in their ledger.

Keep in mind that sundry expenses can grow over time and even become regular expenditures. If this happens, you’ll need to create a new account and name this new, recurring expenditure.