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Categorizing Software Expenses on Financial Statements

Twilight
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Twilight Apprentice

Twilight

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Hello everyone,

I have a question regarding the categorization of software expenses on financial statements. Specifically, I'm wondering if I should list expenses for computer software like accounting or computer protection separately from the software I use to actually fix cars, such as updates to scan tools and management software.

How do you handle these types of software expenses in your financial statements?

Thanks in advance for your help!

 



Twilight Apprentice

Twilight

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Well then, I'm not classifying the ACDelco and Motorcraft programming correctly. although I don't charge the customer for that just don't do enough to justify the yearly charges. 

Twilight Apprentice

Twilight

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No, I charge 2 hours to program. but on the odd brands (GM & Ford) for me, that I program and have to pay oem websites. I eat the fee. I do a lot of BMWs and programming is included in my tool's yearly subscription. 

Twilight Apprentice

Twilight

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I charge 2 hours for programming, doesn't matter the make or model. The customer pays for time only. There is no line item on the customer's invoice for a subscription fee. Whether I pay for programming software by the hour, day, week, year, VIN, credits or tokens, it is my expense in my head.  Every time I pay for software, I have it as an expense. Software for antivirus, bookkeeping, scan tool updates, repair information, shop management, and programming are all listed as an expense and are all in the same expense category. As you are saying, some of that software is a cost of goods. Yet is it a cost of goods if the customer is not billed for it. And does it matter is not an income so it's an expense all cost of goods are an expense anyway as I have to pay for them. Expense cost money. Income brings in money

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Andre R Enthusiast

Andre R

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Posted

The GM is a cost, you have to buy each vin per vehicle the subscription is an expense. The Ford is an expense as your only paying for the software yearly subscription

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