When you’re growing a business, you’re going to face many expenses, many of them recurring. Paying your bills manually is time-consuming, so finding better ways to manage recurring expenses should be a priority. To do this, identify which expenses repeat every month and find ways to automate your payments
Examples of recurring business expenses
A recurring expense is an expense that appears on your accounts payable ledger every month or year. The amount you owe for these can be fixed or variable. Some common examples of recurring business expenses include:
|Rent/mortgageInsurance premiumsPayrollLoan repaymentsSoftware subscriptions||UtilitiesTaxesMarketing costsInventory costsShipping costs|
How to track recurring business expenses
Business expenses were once tracked using paper ledgers, and backed up by a double-entry bookkeeping ledger. To find a recurring business expense was tedious and time-consuming, but thankfully digital technology has made that system obsolete. Spreadsheets are easier to sort, search, and organize than paper, and many businesses use them to track inflows and outflows.
However, it’s even more efficient to automate this process entirely by using expense tracking software such as QuickBooks or NetSuite. These tools are integrated with some business checking accounts, so you can sync your transactions with your expense tracking in just a few clicks. To make expense management even easier, look for a bank or platform that allows you to create sub-accounts—you can use these to set aside budgets for specific types of expenses.
Automate payments for your recurring business expenses
As we mentioned earlier, managing your business expenses manually can be time-consuming. By finding ways to automate parts of your accounts payable process, especially for recurring expenses, you can save yourself time every month. One effective way to do that: automatic payments, or “autopay.”
What is autopay?
Autopay is a setting for automatically paying specific recurring business expenses. You probably use this in your personal life to make your credit card or loan payments. Similarly, using automatic payments for your business expenses will reduce manual work and eliminate late fees as long as you have the cash available in your account. If that’s going to be a problem, try negotiating new payment terms and use autopay as a lever in the negotiations—vendors may offer discounts for automated payments.
Manage recurring business expenses effectively
Paying expenses when they’re due is only one way digital tools can help optimize your business finances. It’s critical that you review your expenses regularly to see where you can cut costs and re-evaluate your budget. Use expense tracking tools to make that easier.
Automate your accounts payable process so you can focus on growing your business.