Delivery fees, airtime top-ups, and small favors for customers are hidden costs eating business profits Kenya owners barely notice. You sell KES 3,000 worth of stock in a day and assume most of it is profit. But between the KES 100 boda boda delivery, the KES 50 airtime to call your supplier, and the “just add a little extra” you give a loyal customer, you’ve lost KES 200 or more without recording it anywhere. Over a month, that adds up to KES 6,000. And if your monthly margin was KES 15,000, you just gave away 40% of it to expenses you never wrote down.
This is the gap between selling more and keeping more. Your sales look fine. Your M-Pesa is active. But at the end of the month, you can’t explain where the money went. The answer is usually sitting in small, unrecorded costs you absorbed every day.
The three expenses most small businesses never record
Most business owners in Kenya track stock bought and sales made. That’s it. The costs between buying and selling rarely make it into any record. And those in-between costs are the ones doing the most damage.
1. Delivery fees you absorb instead of charging
A hardware shop owner in Pipeline sends a bag of cement to a customer’s site via boda boda. The delivery costs KES 150. The customer paid retail price for the cement. Nobody added the delivery fee. Do that three times a week, and you’ve spent KES 1,800 a month on deliveries that no record captures. Every delivery you absorb is a discount you gave but never planned for.
2. Airtime and data used for business calls and M-Pesa
You buy KES 50 airtime to call a supplier in Gikomba about stock availability. You spend KES 20 on data to check prices on WhatsApp. You pay an M-Pesa transaction fee of KES 33 when transferring KES 2,500 to a supplier. None of these go into your records. By the end of the week, you’ve spent KES 400 to KES 600 on communication alone. A salon owner in Kayole spends roughly KES 200 a day on airtime and data just coordinating with clients and suppliers. That’s KES 6,000 a month she never once counted as a business expense.
3. “Small favors” that cost more than you think
A mama mboga gives an extra tomato to a regular customer. A kiosk owner rounds down the price from KES 530 to KES 500 because the customer doesn’t have coins. A mitumba trader throws in a free pair of socks with a shirt purchase to “keep the customer happy.”
Each favor feels tiny. But across 10 or 15 customers a day, those favors add up to KES 100 to KES 300 daily. Generosity without a budget is not customer service. It’s a business leak.
How KES 200 a day turns into KES 6,000 a month
Most owners dismiss small costs because they feel too minor to matter. But the math tells a different story.
A daily cost breakdown for a typical Nairobi kiosk
| Expense | Daily cost (KES) | Monthly cost (KES) |
|---|---|---|
| Boda boda delivery (absorbed) | 100 | 3,000 |
| Airtime and data for supplier calls | 50 | 1,500 |
| M-Pesa transaction fees | 33 | 990 |
| Rounding down prices / free extras | 70 | 2,100 |
| Total unrecorded costs | 253 | 7,590 |
What the numbers look like over 30 days
If your gross profit margin on stock is KES 20,000 a month, and KES 7,590 disappears into unrecorded micro-expenses, your real margin is KES 12,410. You think you’re making 20,000. You’re actually keeping 12,410. That’s a 38% gap between what you earned and what you kept.
A business can be busy without being healthy. Strong sales and weak control over small costs will always produce thin margins.
Why unrecorded expenses are also a tax problem
What Section 15 of the Income Tax Act says about deductible costs
Under Section 15 of the Income Tax Act, Cap 470, a business expense is only deductible if it was incurred “wholly and exclusively” for the purpose of generating income. That means your delivery fees, airtime, and even those boda boda costs are legitimate expenses that could reduce your taxable income. But only if you recorded them.
If you don’t record it, you can’t claim it
Section 23 of the Tax Procedures Act, No. 29 of 2015, requires every person carrying on a business in Kenya to maintain proper records of income and expenses. KRA won’t accept verbal estimates. If a cost isn’t documented, it doesn’t exist in the eyes of the tax authority. You end up paying tax on income that was already spent on business costs you didn’t write down. That’s paying twice for the same mistake.
How to start tracking these costs today
You don’t need accounting software or a spreadsheet. You need one extra line in whatever record you already keep.
A simple daily expense line you can add to your records
At the end of each day, before you count your cash or check M-Pesa, write down every small cost you absorbed. Just three categories are enough to start.
- Delivery costs you paid but didn’t charge the customer
- Airtime, data, and M-Pesa fees used for business
- Free extras, discounts, or rounded-down prices you gave
Template: daily micro-expense tracker
DAILY MICRO-EXPENSE TRACKER
Date: _______________
1. Deliveries absorbed
Customer: _________ | Item: _________ | Cost: KES _____
Customer: _________ | Item: _________ | Cost: KES _____
2. Airtime, data, and M-Pesa fees
Airtime bought: KES _____
Data bought: KES _____
M-Pesa fees (count from statement): KES _____
3. Free extras and price rounding
Describe: _________________________ | Value: KES _____
Describe: _________________________ | Value: KES _____
TOTAL UNRECORDED COSTS TODAY: KES ___________Use a notebook. Use the notes app on your phone. Use WhatsApp messages to yourself. The format does not matter. The habit does. Recorded costs can be managed. Unrecorded costs only grow.
Selling more does not help if you’re leaking from the bottom
The instinct for most owners when margins feel tight is to sell more. Get more customers. Push more stock. But if you’re losing KES 200 to KES 300 a day on expenses you don’t track, more sales just means more leakage at a bigger scale – which is also why knowing how to properly read profit is so important.
| Problem you notice | Likely hidden cause |
|---|---|
| Cash feels low despite good sales | Delivery costs and M-Pesa fees not recorded |
| Profit margin shrinking month to month | Free extras and rounding adding up daily |
| Can’t explain where money went | Airtime, data, and small favors untracked |
| KRA tax feels higher than expected | Deductible expenses not documented |
The goal is not only selling more. It’s keeping more. And keeping more starts with seeing where the small money goes every day. Start today. One line. Three categories. That’s all it takes to close the gap between what your business earns and what it actually keeps.
