What Is a Clerical Cost?
The average company keeps track of numerous separate categories of expenses during the course of business. The two main categories of business costs are operating and nonoperating expenses. On financial statements and reports, you may have to account for the company’s administrative and clerical costs.
Clerical work is just about any task that requires the attention of an administrative employee. Common tasks include copying, printing, dictation, answering phones, filing, and processing accounts receivable and accounts payable. Clerks also handle payroll processing at some companies. Clerical work is commonly performed in an office environment; in some cases, companies hire virtual assistants to handle some of these duties.
A clerical cost is an expense specifically associated with clerical work. It commonly classifies as an operating expense on the income statement, as such tasks are necessary to the constant operation of the business. Some accountants list “Administrative and Clerical Costs” or a similar category as a separate item under the operating-expenses section of an income statement.
Administrative employees are not the only group responsible for clerical expenses at a business. Just about every department incurs clerical costs of some kind. For instance, sales employees need to produce sales materials for clients, and the human resources department maintains files on employees.
Software usage is a basic way to save money on clerical costs. Maintaining a printed paper trail for everything is expensive; you must pay for paper, printing costs and storage. Many software programs allow you to either create files on the computer or scan them to a computer for storage on a hard drive or removable media. Software also streamlines the ability to reference and retrieve information, reducing the need for dedicated clerical workers.