How to Manage and Plan for One-Time Expenses

One of the biggest hindrances to cash flow for business owners are those annual and one-time expenses that can feel like a surprise. But they don’t have to be. With a little planning and preparation, you can manage them smoothly and avoid stress when they arrive.

Yearly expenses—like insurance premiums, software renewals, and membership fees—are often large sums that come due once a year. However, when you’re running a business, it’s easy for these expenses to sneak up on you if you haven’t accounted for them in advance.

Here’s how to stay ahead and avoid scrambling for cash when those bills come due:

1. Make a List of Annual Expenses
Take some time to look back at your past year’s expenses. This includes things like licenses, software renewals, insurance payments, and any other non-monthly bills you pay. Creating a comprehensive list of these expenses is the first step to ensuring you’re prepared for them.

2. Break Them Down Into Monthly Payments
Once you’ve calculated your total annual expenses, divide the total by 12 (or whichever time frame fits best for your needs). This gives you a manageable monthly figure to set aside so that, when the time comes, you’re already covered.

3. Automate Monthly Savings
Make saving for these yearly expenses automatic by setting up a monthly transfer into a separate savings account designated for these costs. Treat this as a non-negotiable expense, just like payroll or rent. By automating this process, you’ll be ahead of the game and won’t be caught off guard when the bills arrive.

4. Track and Adjust
Each year, review the expenses you paid in the previous year. Did you have any new costs? Were there any expenses that weren’t needed? Adjust your monthly savings accordingly and stay on top of your bookkeeping to ensure that your finances are ready for the upcoming year.

By breaking down your yearly expenses into smaller, manageable amounts, you’ll feel more in control of your cash flow. The key is planning ahead, being consistent, and regularly reviewing your numbers.

Don’t let annual expenses take you by surprise—start planning now so that when those big payments are due, they feel like no big deal!

At The Holistic CPA, we help clients properly manage and track their cash flow—planning ahead and creating emergency reserves for unexpected expenses. Ready to get ahead on your finances? Let’s chat!