Expense Tracking FAQ

Expense tracking in MerchantFlow records all business costs -- from software subscriptions and ad spend to fulfillment and contractor fees -- so you can calculate true net profit and monitor your burn rate. This FAQ covers common questions about OPEX vs CAPEX, recurring expenses, burn rate management, attribution, and reporting.

General Questions

What is the difference between OPEX and CAPEX?

OPEX (Operating Expenses):

• Ongoing, day-to-day business costs
• Fully deductible in the year incurred
• Examples: software subscriptions, ad spend, office rent, salaries

CAPEX (Capital Expenses):

• Long-term investments providing value over time
• Depreciated over multiple years for tax purposes
• Examples: equipment purchases, website development, major infrastructure

In MerchantFlow: Choose OPEX or CAPEX when adding expenses to maintain proper categorization for tax and accounting purposes.

How do I set up recurring expenses?

When adding an expense:

1. Toggle "Recurring" to ON
2. Set frequency: monthly, quarterly, or annually
3. Set start date and optionally set end date
4. Save

MerchantFlow automatically creates the expense each period based on frequency. This ensures you never miss recording a subscription and always have accurate monthly expense totals.

Learn more about recurring expenses

Do Google Ads and Meta Ads sync automatically?

Yes, if the integrations are connected. Ad spend syncs automatically as daily spend by campaign, categorized as "Advertising." If auto-sync is not working, you can add ad spend manually with the "Advertising" category.

Connect integrations

What happens if I delete an expense?

Deletion is permanent. The expense is removed from all reports, affecting burn rate calculations and project ROI. Alternative: Edit the expense instead to correct the amount, date, or categorization.

Burn Rate Questions

What is burn rate?

Burn rate is how fast your business is spending (or accumulating) cash:

Monthly Burn Rate = Total Monthly Expenses - Total Monthly Revenue

• Positive burn rate: spending more than earning (burning cash)
• Negative burn rate: earning more than spending (accumulating cash)

Learn more about burn rate

What is a healthy burn rate?

Depends on your business stage:

How do I reduce my burn rate?

Increase revenue: Launch promotions, improve conversion rates, upsell customers, expand product lines.

Decrease expenses: Audit subscriptions for unused or redundant services, pause ad campaigns with ROAS below 3x, negotiate bulk discounts with suppliers.

Expense reduction strategies

Why is my burn rate negative?

A negative burn rate means you are earning more than spending. This is a positive sign indicating a sustainable business model and cash accumulation.

Categories and Attribution

What expense categories are available?

MerchantFlow includes pre-defined categories:

• Marketing and Advertising: Paid search, social ads, influencer marketing, email marketing
• Technology: Software subscriptions, hosting, development, analytics tools
• Operations: Fulfillment, payment processing, inventory management
• Overhead: Office rent, utilities, insurance, accounting
• People: Salaries, contractors, training

You can also create custom categories in Settings > Expense Categories.

Can I attribute expenses to marketing channels?

Yes. When adding an expense, select a Channel (e.g., "Facebook Ads," "Email Marketing") to calculate true channel ROAS including all associated costs, not just ad spend.

What is the difference between project and channel attribution?

• Projects are time-bound initiatives (e.g., "Q1 Product Launch") used for campaign ROI tracking
• Channels are ongoing traffic sources (e.g., "Google Ads") used for continuous performance comparison

You can attribute an expense to both a project and a channel simultaneously.

Learn more about attribution

Recurring Expenses

How do I pause a recurring expense?

Edit the recurring expense and set the end date to today. To resume later, edit again and remove the end date.

Why did my recurring expense not auto-create?

Check that:

1. The Recurring toggle is ON
2. The next occurrence date has passed (monthly expenses create on the 1st)
3. The end date has not passed
4. Allow 24 hours for the system to process auto-creation

Can I edit historical recurring expense entries?

Yes. Each occurrence is a separate record. Edit individual occurrences without affecting others. Changes to the recurring template only affect future occurrences.

Reporting and Export

How do I export expenses for my accountant?

1. Go to Dashboard > P&L > Expenses
2. Set date range (e.g., full year)
3. Click "Export"
4. Choose CSV (for Excel/accounting software) or PDF (for printing)

The export includes date, amount, category, type (OPEX/CAPEX), description, and project/channel attribution.

How do I calculate my true profit including all expenses?

True Profit = Revenue - COGS - Ad Spend - All Expenses

Navigate to Dashboard > P&L and view the "All Costs Summary" panel for revenue, COGS, ad spend, operating expenses, capital expenses, net profit, and net margin percentage.

Can I import expenses from a CSV?

Yes. Go to Dashboard > P&L > Expenses, click "Import Expenses", download the CSV template, fill in your data, and upload.

Frequently Asked Questions

Should I track personal expenses in MerchantFlow?

No. MerchantFlow is for business expenses only. Keep personal and business expenses separate for tax compliance and accurate burn rate calculation.

Can I use MerchantFlow expense data for taxes?

Yes, as a starting point. Export expenses as CSV and provide to your accountant. MerchantFlow tracks amounts, dates, categories, and OPEX/CAPEX types, but does not handle tax-specific depreciation schedules or GAAP accounting.

How often should I record expenses?

Weekly is a good minimum. Daily is ideal for maximum accuracy. Set up recurring expenses for subscriptions to automate most of your expense tracking.

Do payment processor fees sync automatically?

Not currently. Add payment processing fees as a manual recurring expense with the "Operations" or custom "Payment Processing" category.

Related Topics

• Expense Tracking Guide - Full setup guide
• Bank Balance - Cash position tracking
• Burn Rate & Runway - Cash flow analysis
• Attribution System - Project and channel attribution
• P&L Overview - Complete profit tracking

Last updated: March 14, 2026