Why Operating Expenses are important?
Make sure that Operating expenses are not included in cost of goods sold (COGS) but consist of the direct costs involved in the production of a company's goods and services. Meaning Operating expenses are the remaining costs that are not included in COGS. Example of one of the typical operating expenses a Rent.
Here are the three OpEx models:
Constant Amount(Recurring Costs): Go with this expense model, when you have expenses that occur on specific period of time(Daily, Weekly, Monthly, Quarterly or Yearly), With your cost amount you can also specify percentage variation over time for these frequencies. Example of such operating expense is monthly rent you pay for office space.
% of Overall Revenue Or Specific Revenue Stream: Best to use when there may be some operating expenses are directly associated with % of sales. Depending on your revenue stream model, Choose the Revenue Streams and link this expense with it.
% of other Operating Expense: Is your expense directly associated as a percentage of any other Operating expense? Choose this option if you find such a nested relation between expense. Inherit one expense from another expense.
Varying amounts over time: If none of above models are applicable, or you already have a detailed forecast in Excel or elsewhere, Choose this option to just enter overall expense values without any detail. Enter expense values straight-away into the excel sheet.