> For the complete documentation index, see [llms.txt](https://kb.logicerp.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kb.logicerp.com/logic-erp-learning-hub-tutorials-and-best-practices/setups/setup-accounts/setup-new-account/setting-up-expense-accounts.md).
# Setting Up Expense Accounts
**YouTube:** [HOW TO SETUP A NEW ACCOUNT AND MODIFY AN OLD ACCOUNT IN LOGIC ERP?](https://youtu.be/N6s80pZheLc?si=NI9vn54ByaKzyjpW)
## Methods to Setting Up Expense Accounts **in** Logic ERP:
### **Creating a New Expense Account:**
* Navigate to the **Main Menu and then Expand "Setup".**
* **Select "Setup Accounts"** and then Click on "**Setup New Account"**.
### **Enter Basic Details**
* **Account Name:** Enter the name of the account (e.g., **Freight**).
* **Account Type**: Select Expense.
* Expense Type:
* **Direct Expense:** Costs directly related to production or procurement (e.g., raw materials, wages, freight).
* **Factory Expense:** Costs incurred for factory operations (e.g., rent, electricity, machinery maintenance).
* **Trading Expense:** Expenses related to buying and selling (e.g., brokerage, packaging, transportation).
* **P\&L (Operational) Expense:** Routine business costs impacting profitability (e.g., salaries, rent, marketing).
* **P\&L (Non-Operational) Expense:** Indirect costs not directly linked to core operations (e.g., interest, depreciation).
* Set it as Direct Expense and Save the Changes.
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