What is Selling Expenses?
Selling expenses are operating costs directly related to generating revenue, including the salaries of the sales force, sales commissions, marketing, advertising, delivery costs, and other customer-facing expenditures.
How It Works
- Set the chart of accounts categories — sales salaries, commissions, marketing, advertising, delivery, travel.
- Record each expense in the period in which it is incurred under the accrual basis.
- Allocate shared costs to product lines or channels for management reporting.
- Compare selling expenses to revenue and to the budget.
- Disclose selling expenses as a separate line in the income statement or in the notes.
Saudi Context
Saudi consumer and B2B companies disclose selling expenses as a separate line under SOCPA-adopted IAS 1. ZATCA generally allows them as deductible for income tax with proper documentation, though entertainment-type costs may face restrictions.
Example
A retail group reports SAR 3M of selling expenses — SAR 1M sales salaries, SAR 800K advertising, SAR 500K commissions, SAR 400K logistics, SAR 300K other — versus SAR 50M of revenue (6%).