Computers & Software

This Overheads code records the cost of computers and software incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

Creative or digital agency

Substantial monthly licence fees across design and development tools (Adobe Creative Cloud, dev environments, project management SaaS) for a team of specialists. Because these are ongoing subscriptions rather than one-off purchases, they're fully expensed: a £3,390 invoice (£2,825 net of VAT) is a debit of £2,825 to 7552 (Computers & Software), a debit of £565 to 2201 (Purchase Tax Control Account), and a credit of £3,390 to 2100 (Creditors Control Account). Software spend like this can be one of the largest single overhead lines and materially affects margin per client.

Trades or small business

An occasional purchase, such as replacing an ageing laptop used for quoting and invoicing. £360 (£300 net) is a debit of £300 to 7552, a debit of £60 to 2201, and a credit of £360 to 2100 — low-value and low-frequency compared with the agency example.

Any business doing an IT refresh

Buying several new desktop workstations or a server costing £4,000 or more is a different situation again. Because the value is significant relative to the business and the equipment will be used for several years, it should usually be capitalised as a fixed asset and depreciated over its useful life, rather than expensed in full to 7552 — posting a large one-off IT purchase straight to this code is a common error that understates fixed assets on the balance sheet and overstates the current year's expense.

Commonly confused with

Because code 7551 (Internet Charges) sits right next to this one in Overheads, it's a common mis-posting target. Code 7552 is specifically for computers & software, while 7551 covers internet charges — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Computers & Software won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads