Actualité

Nonetheless, the total variable costs will fluctuate with the changes in activity levels. By carefully analysing variable costs, companies can optimise their pricing models to maximise revenue while remaining attractive to consumers. By understanding and managing fixed and variable costs effectively, entrepreneurs can enhance financial stability and drive business growth. Unlike fixed pay, which is a consistent salary or wage, an employee’s variable pay fluctuates based on predetermined criteria such as sales targets, project completions, or company profitability. This form of compensation is used to reward employees for their contributions to the organization’s success, offering a financial incentive to exceed expectations. Common examples of variable costs include the cost of raw materials used in manufacturing, packaging expenses, and utilities that directly correlate with production, such as electricity for machinery.

Meanwhile, industry analysts emphasize the importance of benchmarking against competitors to remain attractive to current and prospective employees. Salaries are typically considered fixed costs, not variable costs. They stay the same regardless of how much your business produces or sells. By implementing machines or software that can perform repetitive tasks or automate manual processes, businesses can significantly decrease the need for human labor while enhancing productivity.

Break-Even Analysis

• Suppose you don’t think you’ll get enough dinner customers to pay for the wait staff, cooks and bussers required.
• The cost of labor significantly influences these ratios, so a deep understanding of a company’s labor structure is crucial for investors seeking long-term success.
• For example, the more profits a company makes, the higher taxes it will pay.
• From an employee’s viewpoint, salaries are a measure of their value to the company.

For example, if a bicycle business had total fixed costs of $1,000 and only are salaries fixed or variable costs produced one bike, then the full $1,000 in fixed costs must be applied to that bike. On the other hand, if the same business produced 10 bikes, then the fixed costs per unit decline to $100. Total variable costs increase proportionately as volume increases, while variable costs per unit remain unchanged. For example, if the bicycle company incurred variable costs of $200 per unit, total variable costs would be $200 if only one bike was produced and $2,000 if 10 bikes were produced. Variable costs are expenses that change in direct proportion to the level of production or sales.

Accounting for Managers

• Fixed costs are a parallel concept to variable costs in corporate finance and business management.
• You then multiply this by the total number of units produced to calculate your total variable costs for the production of that particular product.
• Examples include raw materials, hourly wages (staff on shifts), utilities (energy, water) and sales commissions.
• In business accounting, hourly, salaried, and commission-based wage structures each have distinct characteristics that affect their classification as fixed or variable costs.

For instance, companies may consider remote work arrangements that reduce the need for large office spaces or explore outsourcing options for non-core functions like IT support or payroll processing. By actively managing fixed costs, businesses can enhance their financial resilience and improve their ability to weather economic fluctuations. Effective budgeting is essential for managing both fixed and variable costs in a small business. Understanding the differences between fixed and variable costs is essential for small business owners to make informed decisions and manage their finances. Fixed and variable costs are two distinct categories of expenses that businesses incur in their operations, each with unique characteristics and implications for financial management.

Maybe you need to change suppliers or tweak your product. Fixed costs are also known as overhead costs since they remain static and unchanging no matter what your production output is. These are relatively easy to track using your normal accounting methods—they’re entered as expenses, and are subtracted from gross income to calculate net profit. In this guide, we’ll explain the difference between fixed and variable expenses, provide examples of each, go over accounting differences for the two, and more. Wages paid to employees can be reported as either cost of goods sold (COGS) or administrative expenses in an income statement, depending on the type of business and the role of the employees.

Hourly, Salaried, and Commission Structures

There is no single method for analysing fixed costs in Excel. These costs do not vary with the quantity of goods or services produced or sold by a business, making them essential expenditures that must be covered to maintain operations. Fixed costs are incurred regardless of changes in output and typically remain consistent over time. There’s an old business principle that suggests cutting prices can increase sales volume, which can offset the loss in revenue.

Are Salaries Fixed or Variable Costs?

By understanding the nature of fixed and variable costs, businesses can make informed decisions to improve their financial performance. Furthermore, variable costs are critical for pricing strategies and profit margins. Understanding the relationship between variable costs and pricing enables businesses to set competitive prices while ensuring profitability on each unit sold. While fixed costs remain constant regardless of production or sales volume, variable costs fluctuate with production, sales, and energy consumption. Salaries represent a significant and often the largest expense for most organizations, making them a critical component of budget forecasting. As a fixed cost, salaries are not subject to the same fluctuations as variable costs, such as raw materials or utility expenses.

Use Total Compensation Planning to optimize your compensation packages and align them with business goals. There are currently an estimated 27,500 psychiatrists in the United States. The psychiatrist job market is expected to grow by 11.3% between 2016 and 2026. Conversion ROI, or Return on Investment, is a crucial metric in the world of business and…

So the rent of your warehouse may increase, but this change is separate from increases or decreases in your production output or revenue. From a tax perspective, fixed wages are subject to standard payroll taxes, which are straightforward to calculate and remit. In contrast to variable wages, fixed wages simplify tax compliance and reduce administrative complexity.

If we serve 500 customers, then our average cost per customer is $2. The amount paid for rent does not change, but the cost per customer does. If we serve 100 customers, we will need to purchase food (direct materials) for the 100 meals we serve. So if our cost of goods sold per meal is $4, we would spend $400 on food if we serve 100 meals, but only $200 if we serve 50 meals. Use your variable cost info to run different scenarios.

Factors Determining Labor Cost Classification

For instance, startups may prefer a lean model with lower fixed costs to maintain flexibility as they establish their market presence. This necessity can drive strategic decisions regarding pricing, marketing efforts, and production levels. In industries with high fixed costs, such as manufacturing or real estate, understanding these expenses is essential for long-term viability. Moreover, fixed costs can influence a company’s competitive positioning within its industry. The key differences between fixed and variable costs lie in their stability, relationship to business activity levels, and controllability. By understanding these distinctions, small business owners can effectively manage both types of costs, optimize financial performance, and make informed financial decisions.

You should review your credit report for any errors or discrepancies and dispute them if necessary. You should also monitor your credit score regularly and take steps to improve it, such as paying your bills on time, keeping your credit utilization low, and avoiding unnecessary inquiries. Unlike a traditional loan, a credit line does not require the borrower to take the entire sum at once. Instead, the borrower can access funds up to the definition and basic types of credit line the credit limit as needed and only pay interest on the amount they use.

When you apply for new credit, potential lenders request your credit report and credit score. They use this information to decide whether they want to offer you credit, and on what terms. Unless you go through life on a cash-only basis, you are going to need credit. Good credit will allow you to get student loans, a mortgage, auto loans, business loans and money to pay for other things you may need. Good credit also can affect your job search because many employers check credit scores of potential employees. Debits and credits control how transactions change accounts on the balance sheet and income statement.

Role in the Income Statement

This is why your credit card balance may never seem to go down, even though you’re making payments. When applying, a traditional lender usually wants to see two years of business profit and loss statements, and assets, as well as look at your personal finances. Online lenders may be more flexible, and new businesses may be eligible, although good credit will still be a factor. A credit line is a type of loan that allows an individual or business to borrow money and repay it, often on a revolving basis without applying for a new loan.

Revolving Credit

Business lines of credit offer adjustable funding for organizations based on market value and profitability. Personal lines of credit provide unsecured funds for various purposes, requiring a consistent income and good credit history. HELOCs are secured by a home’s market value, allowing creditors to borrow against the equity in their property. SBLOCs use securities as collateral, enabling investors to borrow against their investment portfolios. Demand lines of credit allow lenders to demand repayment at any time and are either secured or unsecured, depending on the terms. A demand line of credit is a type of bank credit arrangement that lets users borrow money every day or as needed.

Line of Credit vs. Personal Loan vs. Credit Card

Using your credit line for non-essential or non-productive purposes will only increase your debt burden and reduce your available credit for future needs. By budgeting effectively, tracking your credit line activity, and paying off your balance in a timely manner, you can make the most of your credit line while avoiding unnecessary debt. As is the case with any loan, shop around and pay careful attention to the terms—particularly the fees, interest rate, and repayment schedule.

Is there a difference between a Line of Credit and a Loan?

It is a suitable funding option for individuals unable to meet short-term financial requirements. A line of credit helps manage short-term financing demands, such as paying for business inventory purchases or filling a brief gap in personal funds. Borrowers access funds as needed and return the borrowed amount relatively quickly rather than committing to a long-term loan. Access to a line of credit helps investors rapidly take advantage of investing opportunities without selling off current holdings or forfeiting prospective profits. Use a line of credit when dealing with unforeseen costs, including unplanned medical bills or vehicle repairs.

Homeowners increase the value and livability of their property by funding home renovation projects with the help of a line of credit. Home equity lines of credit, or HELOCs, are backed by the home’s equity and usually let an individual borrow up to 85% of its value, less what they owe. Most lenders allow for borrowing up to 80% of equity, while the precise amount varies depending on the situation. Debtors access £80,000 for every £100,000 in equity, according to Forbes Advisor.

There are different types of credit lines available, such as personal lines of credit, home equity lines of credit, business lines of credit, and credit cards. For example, a personal line of credit may offer lower interest rates and more flexibility than a credit card, but it may also have higher fees and stricter eligibility criteria. A home equity line of credit may allow you to borrow a large amount of money at a low interest rate, but it also puts your home at risk if you fail to repay. A business line of credit may help you finance your business operations and growth, but it may also require collateral and financial statements. Therefore, you should compare different options and choose the one that suits your needs, goals, and budget.

Each step keeps the books balanced and reflects the true financial position. Accurate inventory records help avoid overbuying or running out of stock. If total debits and credits do not match, you know there is an error to fix. This system uses two entries for each transaction to keep records accurate and balanced.

• To complete the program, you must make on-time payments each month.
• Determining the appropriate application location for a line of credit requires investigating and evaluating eligibility requirements, such as income and credit score.
• Unlike a traditional loan, a credit line does not require the borrower to take the entire sum at once.
• Establishing the line of credit based on qualifying securities in a taxable brokerage account is the first step in acquiring and using an SBLOC.
• You only pay interest on the amount you actually borrow, not the entire limit.
• Because lines of credit can be drawn on and repaid on an unscheduled basis, some borrowers may find the interest calculations for lines of credit more complicated.

A credit line can be a useful tool for managing cash flow, covering unexpected expenses, or taking advantage of opportunities. However, it also comes with some risks, such as overspending, accumulating debt, damaging your credit score, or losing your collateral. You should use your credit line prudently and only for essential or productive purposes.

By submitting an application, individuals open themselves up to the possibility of obtaining credit approval. However, depending on various factors like credit history or income, the bank may choose an alternate route. For many, the first step towards building credit is requesting a credit report from one of the major credit bureaus. However, without any previous borrowing or payment activity, these reports may reveal an empty slate devoid of any credit information.

• Borrowers enter the repayment period once the draw time expires, during which they have to pay back any outstanding balances following the conditions of the arrangement.
• However, it also comes with some risks and responsibilities that you should be aware of before applying for one.
• You can also use your credit line wisely to achieve your financial goals and improve your financial situation.
• They allow homeowners to borrow against the value of their home for purposes such as home improvements, debt consolidation, or other major expenses.
• That’s because a company or organization is providing you with a good or a service in return for repayment and possibly interest.

The credit limit, interest rate and fees on the account may depend in part on company financials or the amounts deposited in other company-held accounts. The typical interest rates for a line of credit range from 6% to 60%, depending on the creditor’s credit score. Lower credit scores mean higher interest rates and costs on a business line of credit. Long-standing business owners with good-to-excellent credit get approved for the lowest rates, while startups or creditors with poor credit face higher rates and fees. Lenders offer variable rates, such as 6.00% simple interest with Fundible, 7.99% APR with SMB Compass, or 10.25% APR with Wells Fargo. But if you’re looking for lower interest and a limited draw period, you can apply for a personal LOC with a lender.

Or you can visit the Acropolis museum which remains open, with free entrance. Apart from being an important day in Greek history, the 25th of March coincides with a religious celebration, the Annunciation to the Virgin. This was when Angel Gabriel announced to Virgin Mary that she would give birth to a son, who would be called Jesus Christ. The Carnival season begins ten weeks before Easter Sunday, and lasts for three weeks.

This is one of the most important Mexican celebrations and it’s often compared to a wedding. The Cervantino Festival is a cultural festival that is a huge event throughout the city of Guanajuato. The festival began in the mid-20th century when Miguel de Cervantes’ plays called ‘entremeses’ were performed in city plazas. On April 30th in Mexico, children are showered with gifts, candy, and toys. On the third Monday of November, Dia de la Revolucion is celebrated to mark the start of the Mexican revolution.

• Piñatas are usually made out of papier-mâché these days but they were originally made from clay.
• A large display of fireworks would mark the start of the party before the party began.
• Munich is home to a gathering of one of the largest folk festivals in the world.
• This festival celebrates the indigenous cultures of Mexico and features traditional music, dance, and food.

Further Reading on Mexico

Discover the history, traditions, and ways people around the world express affection on February 14th through gifts, romantic gestures, and special events. You may be familiar with one of the most famous festivals of the dead, Día de Muertos, which originated in Mexico. Like the Obon Festival, it is a time for family and friends to honor the dead. Holiday meals often hold symbolic value, representing cultural heritage and shared history, with traditions and recipes passed down through generations. A quinceañera is a coming-of-age celebration for girls who turn 15 years old.

Printable Holiday Cards

Visitors can enjoy free entrance to all the ancient sites and public museums in the country. As part of the traditions, people place food offerings on graves or family altars. The celebrations also include special dances, known as Bon Odori, which are specific to each region.

Day of the Dead Dancers

These may include religious holidays, harvest festivals, and cultural events that are observed annually. When it comes to celebrating, there are countless ways to mark special occasions and create lasting memories. From traditional holidays to personal milestones, celebrations play a significant role in cultures around the world.

• Throughout the Holy Week, people attend various masses at the Greek Orthodox church.
• Jarabe Tapatío, also known as the Mexican hat dance, is arguably the most well-known traditional Mexican folk dance that is often performed at festivals and celebrations.
• These celebrations often involve rituals, traditions, and shared experiences that bind communities together.
• These celebrations often involve gift-giving, parties, special events, and other ways to honor and recognize the achievements and milestones of individuals.
• Mexicans show their patriotic spirit on Independence Day by joyfully blowing whistles and horns, throwing confetti, and chanting “Viva Mexico!
• Jake is a freelance writer from the United Kingdom who’s currently living in Mexico.

Celebrations Today

Celebrations play a vital role in bringing people together, fostering a sense of community, and preserving cultural traditions and practices. By recognizing and participating in various types of celebrations, we can gain a deeper appreciation for the diversity and richness of human culture and society. Whether religious, national, personal, cultural, or seasonal, celebrations provide us with an opportunity to connect, share, and rejoice in the moments that matter most. This article highlights the most important national holidays, cultural events, religious festivals and other special days in Greece.

The festival of death in Mexico

In Greek, Epiphany is called Theofania or Fota, and celebrations is celebrated in a very unique way. Priests everywhere in Greece throw a cross in the sea, and people dive in the cold water to retrieve it. New York City is home to some of the most iconic holiday parades, musicals and art exhibitions in the world.

Songkran Water Festival

Better known as bullfighting, this is a traditional contest that involves a matador (swordsman) and a bull. The origins of this sport come from the need to provide entertainment for the Spanish soldiers stationed in Mexico. In Puerto Vallarta, you can see this spectacle every evening on the Malecon at 6 pm, alongside the stunning sunsets the seaside city has to offer.

The most famous religious festival in Greece is Greek Orthodox Easter, an important celebration with unique local customs. Apart from the religious feasts on 15th August, many more panigiria happen in Greece throughout the year, celebrating the area’s patron saint. In 2025, the Holy Spirit Monday falls on 9 June, and it’s a good opportunity for a long weekend. If you are travelling by ferry over those days, it’s recommended to book your ferry tickets in advance. On Easter Sunday, Greek families gather together to feast on specially prepared Easter meal, like lamb on the spit and red eggs.

Examples of cultural celebrations include Chinese New Year, Oktoberfest, Mardi Gras, and Carnival. The Guelaguetza Festival is a two-week celebration that takes place in Oaxaca. This festival celebrates the indigenous cultures of Mexico and features traditional music, dance, and food. The Guelaguetza Festival culminates with a parade called Lunes del Cerro on the last Monday of July.

Archaeological sites, museums and all stores remain closed on Independence Day. One of my favourite Greece festivals is the Greek Carnival, or Apokries in Greek. Unlike other carnivals, it’s not very well-known outside Greece, yet it’s a fantastic time of the year to be here. As for New Year’s Eve, Greeks usually celebrate with family and friends. Long dinners, card games but also bar-hopping or clubbing are all common ways to celebrate the New Year. J’ouvert, which means « daybreak » or « opening of the day » in French Creole, marks the start of the Carnival celebrations across the Bank Holiday weekend.

Dia de Santa Cecilia is the celebration of the patron saint of musicians, Saint Cecilia. On Dia de Santa Cecilia, musical concerts and events are held in cities and towns across the country. This Mexican holiday is a time for people to celebrate their traditional music. Many people also attend church services and enjoy a large feast with family and friends. Traditional Easter foods in Mexico are mostly fish dishes as Catholics not being allowed to eat meat during these times. Even though it’s one of the biggest Mexican holidays, many Mexicans take the chance to travel to different parts of the country.

Tax time can be particularly stressful as a small business owner, but it doesn’t have to be. The Ramp Business Credit Card makes managing expenses and deductions effortless with automatic receipt capture, real-time spend tracking, and smart categorization. While most ordinary and necessary business expenses qualify for deductions, the IRS may disallow deductions on expenses that are extravagant, excessive, or unrelated to your business. For example, you can only deduct investment interest to the extent of your net investment income. If your investment income is less than the interest you paid, you can carry forward the excess interest to future years. This can be a bit complex, so it’s wise to consult with a tax professional if you’re considering this route.

Compare Cards

If you’re rebuilding credit from issues on your credit history, then secured credit cards are the most suitable option. Our team has sifted through hundreds of offers to highlight the top picks this month — the ones that deliver real value where it counts. From generous welcome bonuses to everyday perks, these are the cards we’d recommend to friends, family — and yes, we use many of them ourselves. Cards typically must score a minimum of 3.0 stars to be included on a “Best” list. However, we may include cards with scores below 3.0 if they have low credit requirements or unique features — despite their scores, these cards may still be among the “best” in certain categories.

Deserve EDU Mastercard for Students vs. Petal 1 “No Annual Fee” Visa

With corporate credit cards, liability may fall solely on the business or be shared between all authorized cardholders. Maintaining a clear separation between business and personal expenses is crucial when utilizing credit cards for business purposes. Commingling funds, or mixing personal and business transactions, can lead to significant complications during tax season and potentially trigger increased scrutiny from the IRS.

Knowing the right forms and documents to claim each credit and deduction is daunting. At Taxfyle, we connect you with licensed, experienced CPAs or EAs in the US. We handle the hard part of finding the right tax professional by matching you with a Pro who has the right experience is interest on a business credit card deductible to meet your unique needs and will file your file taxes for you.

Tax & Online Software Products

The good news is that you may be able to reduce your taxable income by claiming credit card interest deductions. However, to make the most of this opportunity, it’s important to understand the rules, track your expenses accurately, and file the deduction correctly on your tax return. Once the amount of deductible business credit card interest is determined and supported by records, it must be reported on the appropriate tax form. Sole proprietors and single-member LLCs report business expenses, including interest, on Schedule C (Form 1040), Profit or Loss from Business, typically on line 16b. Partnerships and multi-member LLCs report income and deductions on Form 1065, U.S. Both forms have specific lines for reporting interest expense as a deduction.

A beginner’s guide to credit cards

Business credit cards can play a key role in your company’s growth, as long as you find one that suits you. While each is valuable in its own right, individual cards stand out for specific business scenarios, helping you narrow things down even more. This hassle-free flat rate card lets business owners earn 1.5% cash back on every eligible purchase. That can really add up throughout the year, and it’s especially valuable considering this card charges no annual fee. It’s also worth noting that your rewards never expire so long as the account remains open. Yes, you can claim credit card interest deductions on a personal card used for business, but only for the interest related to business expenses.

For example, interest on inventory, supplies, or equipment purchases generally qualifies. This standard, defined in IRS Publication 535, serves as the foundation for determining whether credit card interest qualifies as a deductible business cost. The IRS allows interest deductions if the charges are for ordinary and necessary business costs. This means the expenses must be common and accepted in your industry and essential to your business operations. Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations.

• Additionally, if you have a business credit card, the interest on that card is typically deductible as well.
• For small businesses and startups that want a little bit of everything, the Ink Business Unlimited® Credit Card comes ready to provide.
• The IRS does not allow deductions for credit card late fees, over-limit fees, or interest on unpaid penalties.
• A well-documented system can also safeguard you in case of an IRS audit.

Failing to Separate Personal and Business Expenses:

If you’re using it for business expenses or investments, you may qualify for deductions. Keeping organized records and consulting with a tax professional can help you navigate the complexities of tax deductions related to credit card interest. For instance, if you use your credit card for business expenses, you may be able to deduct the interest incurred on those charges. This means that if you’re using your credit card to purchase supplies, equipment, or other business-related expenses, the interest can be written off as a business expense on your tax return. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site.

• Brad has worked at Everlance since 2021 with a focus on helping self employed people save time and money on their taxes.
• Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice.
• When business credit card interest is deductible, it directly lowers your tax burden.
• The transaction shows up on your credit card statement, and you repay the bank for the purchase.

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Business credit card interest qualifies if it arises from expenses directly related to business operations, such as purchasing office supplies, inventory, or paying for business travel. The deduction applies only to the interest portion of payments, not the principal amount. Personal interest, such as that from living expenses, is not deductible. A credit card interest deduction allows you to reduce your taxable income by deducting the interest paid on credit card balances used for business-related expenses. Essentially, if you carry a balance on a credit card that is used for business purposes, the interest charges on that balance may be deducted as a business expense.

She’s been writing about credit cards and reward travel since 2011 with articles on Forbes Advisor, BoardingArea, The Points Guy and more. Her redemptions have helped her travel to more than 50 countries and all seven continents. Learn more about how to get a business credit card, including tips on how to improve your odds of approval and a few potential issues to watch out for.

You might get 2 points per dollar on all purchases, or 1.5% cash back on everything. Before joining NerdWallet, Sara worked at The Motley Fool for nearly 10 years. She also worked as a freelance personal finance writer and paraplanner and has a bachelor’s degree in journalism from Northwestern University.

Make sure to differentiate between personal and business purchases, even if they’re made on the same card. Annual fees, late payments, and other card-related charges may be deductible as business expenses separate from interest. With TurboTax Live Business, get unlimited expert help while you do your taxes, or let a tax expert file completely for you, start to finish. Our small business tax experts are always up to date with the latest tax laws and will ensure you get every credit and deduction possible, so you can put more money back into your business. Small business owners get access to unlimited, year-round advice and answers at no extra cost and a 100% Accurate, Expert Approved guarantee. Personal interest is interest you pay for goods and services you don’t use for work or business-related purposes.