Expenses and costs are two terms used in business that have some overlap but represent different concepts. An expense is an outlay of money or the amount spent on something. It’s a financial burden incurred by an individual or organization. On the other hand, cost is an economic value attributed to goods or services produced. In other words, cost refers to what was used to produce something rather than what it will take to replace it. In short, expenses are the direct expenditure of money while costs are the resources used to produce something.