Operating expenses in France: PCG classification, fixed vs variable costs, interim management ratios and optimisation 2026

Updated April 2026 — Operating expenses (charges d'exploitation) form the core of any French company's income statement. They cover all expenditure incurred in the normal course of business, excluding financial charges and exceptional items. Understanding how to classify, analyse, and link them to the soldes intermédiaires de gestion (SIG — interim management ratios) is a key skill for managing the profitability of any SME or small business in France in 2026.

Also read Financial management, How to read a French balance sheet and Accounting for self-employed professionals.

Operating expenses are defined in France's Plan Comptable Général (PCG, ANC regulation 2014-03) as charges relating to the company's main activity. Article L123-12 of the French Commercial Code requires any commercial or industrial entity to record them faithfully.

They are distinct from:

• ▸financial charges (interest on borrowings, bank charges, exchange losses — accounts 66x)
• ▸exceptional charges (fines, penalties, asset disposals — accounts 67x)

In a French PCG income statement, operating expenses appear on the left-hand side of the table format or in the upper section of the account format, before the operating result.

The PCG breaks down operating expenses across accounts 60 to 65 in Class 6:

Account 60 — Purchases

Account 60 covers all purchases of goods for resale, raw materials, and supplies:

• ▸601 — Raw materials and production supplies
• ▸602 — Other supplies
• ▸604 — Studies and service purchases
• ▸607 — Purchases of goods for resale
• ▸608 — Incidental purchase costs (transport, insurance on goods)

Inventory movements (accounts 6031–6037) adjust these to arrive at the cost of goods sold (COGS) or the cost of production consumed.

Accounts 61-62 — External services

These accounts group external charges:

• ▸611 — General subcontracting
• ▸612 — Finance lease and rental charges
• ▸613-614 — Leases (movable and immovable)
• ▸615 — Maintenance and repairs
• ▸616 — Insurance premiums
• ▸621 — Temporary staff
• ▸622 — Intermediary fees and professional fees (accountants, lawyers, consultants)
• ▸623 — Advertising, publications, PR
• ▸624 — Goods transport and staff transport
• ▸625 — Travel, missions and entertainment
• ▸626 — Postage and telecommunications
• ▸627 — Banking services (excluding interest)
• ▸628 — Miscellaneous (professional subscriptions, memberships)

Account 63 — Taxes and levies

• ▸631 — Contribution économique territoriale (CET = CFE + CVAE, French business tax)
• ▸635 — Other taxes (commercial premises tax, property tax on business buildings)
• ▸637 — Training levy, apprenticeship tax

Account 64 — Personnel costs

• ▸641 — Gross wages and salaries
• ▸645 — Social security and welfare contributions (employer's share: URSSAF, supplementary pension)
• ▸648 — Other personnel costs (occupational health, meal vouchers employer share)

Personnel costs (64x) typically represent the largest or second-largest line of operating expenses for service businesses, and are a primary lever for economic management.

Account 65 — Other current management charges

• ▸651 — Royalties for concessions, patents, licences
• ▸654 — Losses on irrecoverable receivables
• ▸658 — Miscellaneous current management charges

The PCG classification (60-65) reflects the nature of costs. For management purposes, a second classification is essential: the distinction between fixed costs and variable costs.

Fixed costs (structural costs)

Fixed costs are independent of the level of activity. They exist even when the company produces or sells nothing.

Examples: office rent, insurance premiums, SaaS subscriptions, executive remuneration (self-employed), support function salaries, depreciation, lease payments.

Key feature: the unit cost of fixed charges falls as activity volume increases (dilution effect). This is the basis of operating leverage: turnover growth drives a disproportionately larger increase in operating profit.

Variable costs (operational costs)

Variable costs evolve proportionally (or near-proportionally) with the level of activity.

Examples: cost of goods purchased, production subcontracting, sales commissions, delivery transport costs, temporary labour.

Key feature: the unit cost of variable charges remains stable regardless of volume. This allows calculation of the contribution margin.

Breakeven analysis

The fixed/variable distinction enables calculation of the breakeven point — the minimum revenue needed to cover all costs:

Breakeven = Total fixed costs ÷ Contribution margin ratio

Example for an industrial SME:

• ▸Annual revenue: €800,000
• ▸Total variable costs: €480,000
• ▸Contribution margin: €320,000 → ratio = 40%
• ▸Total fixed costs: €240,000
• ▸Breakeven = €240,000 ÷ 40% = €600,000

The company becomes profitable above €600,000 revenue. The safety margin is €200,000 (€800,000 − €600,000), or 25% of revenue.

The soldes intermédiaires de gestion (SIG), defined by the Plan Comptable Général, allow analysis of how operating profit forms from operating charges and income:

The EBE (equivalent to EBITDA) is the SIG most used by financial analysts and banks: it measures the company's capacity to generate cash from its own activity, independent of its depreciation policy and financing structure.

A negative EBE (called insuffisance brute d'exploitation, IBE) is a serious warning: the activity consumes more resources than it generates, even before financing investments and debt service.

External services ratio = External services (61-62) ÷ Revenue excl. VAT

• ▸B2B service SMEs: typically 15-30%
• ▸Subcontracting industry: may exceed 40%

Personnel cost ratio = Personnel costs (64) ÷ Value added

• ▸National benchmark across sectors: approximately 60-70%
• ▸A ratio above 80% signals a cost structure under stress

Value-added ratio = Value added ÷ Revenue excl. VAT

• ▸Key indicator of economic density: a high ratio (above 50%) indicates strong internal value creation

Operating ratio = Total operating charges ÷ Total operating income

• ▸A ratio close to or above 100% signals weak or negative operating profitability

Lever 1: renegotiate recurring service contracts

Insurance, telecoms, IT maintenance, and SaaS subscriptions are often renewed automatically without renegotiation. An annual review typically reduces fixed charges by 5-15% on these items.

Lever 2: analyse the make-or-buy decision

Comparing the true cost of in-house labour (salary + social charges + training + management overhead) against subcontracting costs (account 611) must be based on full cost. The decision to insource or outsource directly affects the fixed/variable structure of operating costs.

Lever 3: tighten travel and entertainment policy

Accounts 625 (travel) and 623 (entertainment) are frequently undermanaged. A clear expense policy with caps by category reduces overspend and simplifies URSSAF audits.

Lever 4: review purchasing terms

Supplier payment terms (deadlines, discounts for early payment) directly affect cash flow and indirectly reduce financing charges. Paying early for a 2% discount can represent an implicit annual return of 24% if standard terms are 30 days.

Lever 5: track personnel productivity

The ratio of revenue (or value added) to payroll mass is a key productivity indicator. Its trend over time reveals whether business growth has translated into productivity gains or into a drift in personnel costs.

Hayot Expertise insight: reading operating expenses is far more powerful when structured around interim management ratios (SIG) and sector benchmarks. An accounting firm that simply produces the income statement without analysing these indicators does not give you the tools to steer your business. We systematically build monthly dashboards for our SME clients centred on value added, EBE, and the breakeven point.

Operating expenses are not a simple accounting block to minimise. They are the economic map of your activity. Their PCG classification (60-65) provides the legal and accounting foundation; the fixed/variable distinction unlocks strategic management; and the SIG link these costs to overall performance. In 2026, mastering operating expenses means mastering profitability.

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(Official sources: PCG ANC regulation 2014-03, French Commercial Code art. L123-12, BOFiP — deductible charges, Entreprendre.Service-Public.fr, available on Légifrance)

What are operating expenses in a French income statement?

Operating expenses (charges d'exploitation) cover all costs related to normal business activity: purchases of goods and raw materials (accounts 60), external services (accounts 61-62), taxes and levies (account 63), personnel costs (account 64), and other current management charges (account 65). They are distinct from financial charges (66x) and exceptional charges (67x).

What is the difference between fixed costs and variable costs in French accounting?

Fixed costs (loyer, insurance, executive remuneration) exist regardless of activity volume — they do not change when revenue increases or falls. Variable costs (goods purchases, subcontracting, commissions) evolve proportionally with activity. This distinction enables calculation of the breakeven point and the contribution margin, and is the basis of operating leverage analysis.

What is the EBE (excédent brut d'exploitation)?

The EBE is the French equivalent of EBITDA — it measures the wealth generated by current activity before depreciation, financing costs, and taxes. It is calculated from value added (VA) by subtracting personnel costs and operating taxes. A positive EBE confirms the activity generates cash; a negative EBE (IBE) is a critical warning signal about the viability of the business model.

How can an SME optimise its operating expenses?

The main levers are: renegotiating recurring contracts (insurance, telecoms, SaaS), analysing make-or-buy decisions for subcontracting, managing travel and entertainment expenses with a clear policy, optimising purchasing terms (early payment discounts), and tracking productivity per employee (revenue or value added relative to payroll). An annual cost structure review with a chartered accountant is recommended.