Expenses

Expenses relating to consignment of goods are divided into two categories viz., (i) Non-recurring Expenses, and (ii) Recurring Expenses.

 



(i) Non-recurring Expenses

All the expenses which are incurred for bringing goods to the godown of the consignee are non-recurring in nature. Such expenses are generally incurred on the consignment as a whole. The non-recurring expenses will be incurred partly by the consignor and partly by the consignee.

The consignor usually incurs expenses on sending the goods to the consignee such as packing, cartage, loading charges, insurance, freight. etc. The consignee usually incurs expenses on receiving the goods from the consignor such as dock dues, customs duty, clearing charges, octroi, etc.

 

(ii) Recurring Expenses

These expenses are incurred after the goods have reached the consignee’s place or godown. They are recurring in nature because they may be incurred repeatedly by the consignor and the consignee.

The examples of recuing expenses incurred by the consignor are: advertising, discount on bills, commission on collection of cheques, travelling, expenses of salesmen, bad debts etc. The examples of recurring expenses incurred by the consignee are godown rent, godown insurance, sales promotion, etc.

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