Equipment Hire
OverheadsThis Overheads code records the cost of equipment hire 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
Construction — plant hire
Hiring an excavator, scaffolding or a generator from a plant hire company for the duration of a job — short-term and often tied to job costing for that specific contract. A week's excavator hire at £2,400 (£2,000 net of VAT) is a debit of £2,000 to 7700 (Equipment Hire), a debit of £400 to 2201 (Purchase Tax Control Account), and a credit of £2,400 to 2100 (Creditors Control Account).
Events and entertainment
Hiring AV equipment, staging and lighting for a single conference or event — a high but genuinely one-off cost, closely tied to that job's margin. £3,600 (£3,000 net) is a debit of £3,000 to 7700, a debit of £600 to 2201, and a credit of £3,600 to 2100.
Office-based business
Short-term hire of, say, a projector or extra photocopier for a one-off event is small — £120 (£100 net) is a debit of £100 to 7700, a debit of £20 to 2201, and a credit of £120 to 2100. It's worth keeping this distinct from a longer-term financed arrangement to use equipment like the office's main photocopier, which behaves more like a leasing cost and belongs in 7702 (Equipment Leasing) or 7703 (Leasing Costs) rather than here.
Commonly confused with
Because code 7701 (Office Machine Maintenance) sits right next to this one in Overheads, it's a common mis-posting target. Code 7700 is specifically for equipment hire, while 7701 covers office machine maintenance — 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 Equipment Hire 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.