Overhead expenses refer to the indirect costs associated with running a business that are not directly tied to the production or sale of goods or services. These expenses include rent, utilities, insurance, office supplies, and salaries of administrative staff. Overhead expenses are necessary for the smooth functioning of a business, but they do not generate revenue directly. Therefore, it is important for businesses to manage their overhead expenses efficiently to maximize profits. This can be achieved by identifying areas where costs can be reduced without compromising the quality of operations. Effective management of overhead expenses requires a thorough understanding of the business’s operations and financials, as well as the ability to make informed decisions based on data analysis. By controlling overhead expenses, businesses can improve their bottom line and increase their competitiveness in the market.
