The fixed-cost vs expense decision affects how nouz spreads the cost across your daily EBIT — and getting it wrong can make a single day look catastrophically negative when it shouldn't.
01 The five-second test
Fixed costs are recurring — they show up every week, month, or year on a predictable schedule. Expenses are one-offs or irregular — they happen when they happen.
02 When it's a fixed cost
- Rent (monthly).
- Base salaries (monthly).
- Insurance (monthly or yearly).
- Software subscriptions (monthly).
- Annual licence renewals (yearly).
03 When it's an expense
- Buying a new espresso machine.
- A one-off advertising push.
- A plumber call-out for a broken sink.
- A bulk supply order.
- Staff overtime for a one-off event.
04 Large capital purchases
For the espresso machine specifically: technically it's a capital purchase your accountant will depreciate over several years. For your daily P&L purposes, log it as a one-off expense (probably Repairs or Other) on the day you paid for it. Your accountant's books will treat it differently — and that's why nouz and the accountant's P&L will diverge, by design.
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