Recurring expense

A recurring expense refers to a cost that is incurred on a regular, predictable basis as part of business-related obligations. They repeat over time, either at fixed intervals, such as weekly or monthly, and are usually necessary for facilitating frequent business operations. 

For example, a consulting firm sends employees to a city for weekly client visits. Each consultant requires a rental car to travel between client sites. The firm sets up a recurring expense for a weekly car rental subscription with a preferred vendor, which automatically charges the company the same amount each week.

It’s important to identify and manage recurring expenses to improve budget predictability, streamline financial planning, and ensure that resources are allocated efficiently. By recognizing these regular costs, finance teams can better forecast overall budgets, avoid cash flow surprises, and implement policies that control unnecessary or excessive spending.