These three categories are often and easily confused! It's important to correctly classify your office expenses, supplies, and equipment to make things easier for tax time.
Your office expenses can be separated into two groups - office supplies and office expenses. The third, large office equipment or furniture, should each be classified as a fixed asset to be depreciated over time.
Here's a breakdown:
OFFICE SUPPLIES + SMALL EQUIPMENT (Expense Account)
These are tangible items you need to refill - think staples, paper, printer ink, pens, coffee, uniforms, etc. Small equipment purchases that are generally under $2500 can also be categorized here since they are not material.
OFFICE EXPENSE (Expense Account)
This covers most other business expenses that are necessary to function and are often intangible. For example - utilities, software subscriptions, accounting software subscriptions, postage, cleaning services, etc.
When creating your chart of accounts, you can choose to either differentiate office supplies from expenses, or group them all into one expense account. That being said, it can be nice to see everything clearly and distinctly separate.
OFFICE EQUIPMENT / FURNITURE (Fixed Asset)
Any big equipment or furniture pieces that are generally over $2500 and are being used for more than one year. Examples include computers, major software programs like Photoshop, desks, printers, etc. These are all individual fixed assets that cannot be 100% expensed in the year they were bought.
Ask your accountant at the end of the year how these should be expensed. In the meantime, you can create a 'Office Equipment + Furniture' fixed asset account to keep track of all office asset purchases for the year.
There you have it - a rundown on the difference between office supplies, office expenses, and office equipment! Let me know if you have any additional questions, I'd be happy to answer them for you.