What is Delivery Expense?

Delivery expense is a general ledger account, in which is stored all freight out expenses incurred by a business. Expenses that may be stored within this account include the costs of fuel and fees paid to third-party transport services. These costs are often tracked closely, as they can significantly impact the overall profitability of delivering products to customers.

Examples of Delivery Expenses

Here are several examples of the expenses that are usually included within the delivery expense classification:

Freight charges. Expenses for transporting goods via freight companies, especially for large shipments or long distances.
Delivery software fees. The fees paid for third-party delivery or logistics software, like route optimization tools.
Fuel costs. The expenses for fuel when using company vehicles for deliveries.
Vehicle maintenance and depreciation. The costs related to maintaining delivery vehicles, including repairs, tires, and the gradual loss of vehicle value over time.
Delivery driver wages. The salaries and and benefits paid to employees who handle deliveries.

Presentation of Delivery Expense

The delivery expense account may be included within the cost of goods sold line item in the income statement. Only in rare cases is it stated separately - usually when a small business includes every account in its income statement. It might also be stated separately when the delivery expense constitutes a large proportion of the cost of goods sold.