What Are Maintenance Costs? + 5 Ways to Manage Them

Accurately describe the contents of the photo with a lean toward the KW
Accurately describe the contents of the photo with a lean toward the KW

Maintenance costs are necessary business expenses used to keep assets in good working condition. Many organizations rely on cost analysis and management to make responsible financial decisions, reduce waste, and increase efficiency.

Understanding more about these costs can help your organization make better, more strategic asset management decisions. This article will discuss some practical ways to manage and reduce maintenance costs. We’ll also discuss how LLumin’s CMMS+ can help you manage assets, optimize maintenance, and reduce costs in your organization.

Understanding Maintenance Costs

Any organization that needs to maintain equipment, property, vehicles, and other expensive assets will incur some type of maintenance expense. Understanding the specific costs required to repair equipment and facilities can help a company better plan and budget for its maintenance activities

Maintenance costs fall into three main categories: Fixed, Variable, and Semi-Variable, covering a range of expenses from property and equipment maintenance to employee and insurance costs. 

These costs are listed below, with examples for further consideration:

  • Fixed Costs are consistent expenses that do not vary with the production or business activity level. Examples include salaries of maintenance staff and recurring maintenance contracts.
  • Variable Costs fluctuate with business activity levels. More production can lead to higher maintenance needs, affecting costs like raw materials and utility bills.
  • Semi-variable Costs have characteristics of both fixed and variable costs, changing with business activity but also including a fixed component, such as overtime pay for maintenance staff or certain contractual services.

Examples of Maintenance Costs


Annual inspections and repairs, such as fire suppression system maintenance, to ensure facilities remain operational and safe.


These costs cover software upgrades and security updates to maintain operational efficiency and protect against cyber threats.


These costs involve repairs and preventive measures to reduce downtime and extend the lifespan of machinery and equipment used in operations.

Maintenance Costs Vs. Capital Expenditures

There are significant financial implications of effective and ineffective asset management; how well a company manages its costs will play a major role in its ability to stay competitive. Understanding the distinction between maintenance costs and capital expenditures can help further clarify your budgeting and financial reporting. 

  • Maintenance Costs: Routine maintenance costs include minor repairs and cleaning to keep an asset in its original condition. These are expensed on the profit and loss statement, affecting annual profit.
  • Capital Expenditures: Investments that increase or extend the life of an asset, such as major upgrades or replacements. These costs are capitalized on the balance sheet and depreciated over time to reflect their long-term value to the asset owner.

Strategies for Managing Maintenance Costs

Below, we’ve listed the top ways an organization can better manage and reduce maintenance costs. These strategies can also extend asset lifespan and significantly reduce unnecessary expenses, especially attributed to unplanned downtime. 

  1. Preventive Maintenance: Adopting preventive maintenance that includes regularly scheduled inspections and repairs will help reduce your rates of unplanned downtime and costly emergency repairs. 
  2. Employee Training: Training your employees to have the necessary skills to perform maintenance will help reduce your organization’s need to pay other companies to perform them.  
  3. CMMS Software: A Computerized Maintenance Management System (CMMS) can help you track maintenance activities and inventory and gain a high-level overview of your maintenance costs. LLumin’s CMMS+ can help your organization make maintenance decisions based on prioritization and risk. 
  4. Performance Audits: Regularly review your maintenance operations to identify high costs and inefficiencies.
  5. Outsourcing: When necessary, consider outsourcing maintenance tasks when it is more cost-effective to do so. 

How LLumin’s CMMS+ Can Help Reduce Costs

LLumin’s CMMS+ can be a powerful tool that helps your organization cut costs and optimize outdated processes. LLumin’s cloud-based, mobile-ready platform can help you automate preventive maintenance tasks, gain access to essential and comprehensive financial reports, and keep your equipment working at peak performance levels for longer periods of time. 

LLumin also provides predictive data analytics to help you identify trends and make better asset management decisions. LLumin’s ability to help users assess risk, effectively prioritize maintenance tasks, and allocate resources can also greatly contribute to cost savings.

Reduce Maintenance Costs With LLumin’s CMMS+

Managing maintenance costs well is key to effective asset management and being financially responsible. By using the right plans and tools, a company can make sure its equipment works well and lasts longer, keep a better eye on its spending, and make strategic decisions to stay ahead of the competition.

Getting Started With LLumin

LLumin develops innovative CMMS software to manage and track assets for industrial plants, municipalities, utilities, fleets, and facilities. If you’d like to learn more about the total effective equipment performance KPI, we encourage you to schedule a free demo or contact the experts at LLumin to see how our CMMS+ software can help you reach maximum productivity and efficiency goals.

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