Ex-Pocket

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Ex-Pocket (or ExPocket or Ex Pocket ) is a synonymous short name for external expenses (in English "Out-of-pocket expenses"). This term is used in investments to differentiate costs - often when a decision has to be made on marginal investments.

In simple terms, these are additional, external costs that only arise when the investment takes place. For this reason, the personnel costs already budgeted in companies (which exist “anyway”) are usually not included; also be overhead ignored.

Ex-pocket expenses include, for example, those necessary for the investment:

• material costs
• Traveling expenses
• external services

For example, ex-pocket expenses do not include those necessary for the investment:

• Personnel costs (internal hourly costs)
• Overhead and risk surcharges

While, for example, in the capital goods sector (e.g. special machine construction) and in internal projects, the ex-pocket costs are often used as a decision-making aid with regard to the implementation of the investment, the ex-pocket cost considerations in the service industry are not suitable for decisions about the implementation of external projects , since neglecting personnel costs for services would give a completely distorted picture.