The guide to planning and budgeting for periodic expenses

Periodic expenses are expenses and other financial obligations that occur at regular intervals throughout the year, but not monthly. Unlike your monthly rent or phone bill, these costs appear quarterly, semi-annually, or annually. Examples include property taxes, insurance premiums, and annual professional dues. These expenses follow predictable schedules, but their infrequent nature can create budget challenges when they arrive.

These costs differ from both fixed and variable expenses. Fixed expenses remain consistent each month, like mortgage payments or salaries. Variable expenses fluctuate based on activity levels or other factors, such as utility bills that rise in extreme weather or material costs that change with production volume. Periodic expenses might have fixed amounts, but their defining feature is their timing rather than their size.

While periodic expenses are often infrequent, they are predictable, giving businesses and individuals an opportunity to plan effectively. Instead of scrambling for funds when a quarterly tax payment comes due, financial managers can implement accrual approaches by setting aside small amounts monthly. This prevents any disruption to cash flow and makes potentially large payments a manageable part of your financial plan.

Properly accounting for these expenses can help companies maintain long-term financial health, business stability, and operational consistency.

Recognizing typical periodic expenses can help businesses prepare budgets and effectively manage cash flow. Here are the eight most common periodic expenses businesses encounter.

Quarterly estimated taxes

Businesses that aren’t subject to regular tax withholding typically need to pay income taxes quarterly, and this can represent a significant cost for many companies. These payments require careful planning and accurate cash projections so sufficient funding is available when tax deadlines arrive. Small businesses and self-employed professionals need to pay close attention to setting aside the right amounts throughout each quarter.

Annual property taxes

Taxes assessed on real estate or business property generally arrive annually or semi-annually and often require large payments. Since these assessments are predictable, companies can allocate funds monthly, preventing financial strain when the bill arrives. Nonetheless, property taxes can fluctuate based on reassessments and local tax rate adjustments, requiring businesses to monitor potential increases.

General liability insurance

Businesses typically carry liability insurance, and those premiums are paid annually or semi-annually. Without the proper budgeting and planning, businesses can find themselves temporarily cash-strapped after making these payments. Businesses can strategically plan for these expenses by treating them not as occasional surprises but as ongoing obligations distributed across monthly budgets.

Professional licenses and certifications

Industry-specific credentials and professional licenses often require regular renewal, and those fees usually arrive annually. While individual renewal fees may not be a burden, companies with numerous certified professionals can face a significant cumulative expense. Healthcare organizations, financial services firms, and specialized contractors must account for these recurring costs in their annual financial planning.

Scheduled equipment maintenance

Planned servicing or inspections for business equipment and facilities typically occur on an annual or bi-annual schedule. This preventative maintenance reduces the risk of costly repairs but does require budgeting. In particular, manufacturing operations, restaurants, and technology-dependent businesses need to plan for these costs to preserve their equipment and operational reliability.

Software renewals

Regular renewal payments for software and subscription-based services often appear as annual charges and are increasingly crucial to a business’s operation. While monthly subscriptions have gained popularity, many enterprise solutions still require annual payments. Organizations must carefully track renewal dates for customer relationship management systems, accounting platforms, and productivity tools to avoid service interruptions or unexpected payments.

Annual employee bonuses

Bonus payments awarded at year-end or tied to company performance require advanced planning and budgeting throughout the fiscal year. These periodic expenses directly affect employee morale and retention, but they can strain cash reserves if they’re not properly anticipated. Establishing monthly accruals based on performance projections can ensure bonus payments are manageable.

Membership dues and subscriptions

Payments for memberships in professional organizations, industry groups, or trade associations commonly renew on an annual basis. These commitments provide valuable networking and educational opportunities, but require some financial planning. While individual memberships may represent modest expenditures, companies supporting numerous professional affiliations face noticeable cumulative costs. Tracking these renewals and evaluating their business value helps organizations manage these recurring operating expenses.

Proactively managing periodic expenses gives your business advantages beyond avoiding financial disruption. Organizations that effectively plan for these costs can see increased stability and growth potential.

Improved operational stability

Businesses that effectively manage periodic expenses eliminate cash flow fluctuations that can plague many organizations. This gives businesses the stability to maintain reliable staffing levels, consistent inventory management, and dependable customer service. When major periodic expenses arrive, they register as planned financial events rather than operational crises. This operational consistency creates a foundation for sustainable growth, allowing leadership to focus on strategic initiatives rather than financial emergencies.

Enhanced capability for strategic planning

When periodic expenses are properly forecasted and budgeted for, budgets become more accurate. This enables confident strategic planning as financial projections include all anticipated costs with proper timeframes. As a result, leadership teams can make expansion decisions, capital investments, and hiring plans with reduced uncertainty about future financial capacity. The resulting strategic clarity improves resource allocation across all departments and initiatives.

Reduced organizational stress

While difficult to quantify, one of the most significant benefits of properly planning for periodic expenses is a reduction in financial anxiety throughout the organization. When periodic expenses arrive and payments are already fully funded, they generate minimal disruption. This alleviates stress for financial staff, operational managers, and executive leadership alike. Transforming potentially worrisome expenses into routine transactions creates a more positive culture focused on growth opportunities rather than financial threats.

Tracking and forecasting periodic expenses ensures your business remains financially stable throughout the year. This step-by-step approach can help your business accurately anticipate and manage these costs.

1. Identify and review historical expenses

Gather and review financial records from the past 12 to 24 months. Look specifically for expenses that recur quarterly, semi-annually, or annually. Categorize these expenses into clear groups, including taxes, insurance, maintenance, software renewals, and others.

2. Document each expense

Record each periodic expense in a spreadsheet or financial tracking software. This systematic documentation makes these irregular expenses manageable data points. Include the following details:

• Expense name
• Category
• Amount
• Frequency
• Due date

3. Create a periodic expense calendar

Develop a calendar with due dates for each periodic expense. This could be a digital calendar or a spreadsheet highlighting payment periods. Mark key months with multiple large payments, identifying potential cash flow crunch periods that require additional planning. Set reminders or alerts for approaching due dates to ensure expenses are proactively budgeted for to avoid surprises that disrupt operations.

4. Calculate annual total of periodic expenses

Add together all of the periodic expenses expected within the upcoming year to understand the total annual cost. Include any anticipated changes based on vendor communications, inflation, or other known adjustments. This aggregation shows the true financial impact of these costs, which can be a substantial portion of annual financial obligations.

5. Allocate monthly funds

Divide the total annual cost of periodic expenses by 12 months to determine how much your business should set aside on a monthly basis — this is known as establishing a “sinking fund,” Each month, transfer the calculated monthly amount into a dedicated savings or reserve account. High-yield accounts with same-hour liquidity, like the Brex business banking account, can maximize your savings. Treat this as a monthly fixed cost to avoid large cash outflows when periodic expenses arise.

6. Integrate into budgeting and cash flow planning

Include monthly allocations in your overall budget planning process and regularly revisit these funds in cash flow meetings to verify your savings are sufficient, adjusting allocations if necessary. This ensures periodic expenses are accounted for and aren’t forgotten.

7. Regularly review and update forecasts

Review actual versus forecasted periodic expenses quarterly to identify discrepancies or surprises. Adjust your future projections and monthly allocations based on these reviews to help refine cash flow forecasts over time. Organizations can discover that their accrual accuracy improves substantially after several quarterly review cycles.

8. Leverage expense tracking software to simplify tracking

Expense tracking software automates and simplifies the cash flow management process. Platforms like Brex allow businesses to efficiently track business expenses through automated reminders and alerts for payment due dates. These tools can reduce the administrative burden of planning for periodic expenses while improving the reliability of your expense management.

Periodic expenses can create cash flow challenges that destabilize otherwise financially sound businesses. These intermittent costs introduce liquidity pressure points throughout the fiscal year, potentially depleting cash reserves when several major expenses coincide with slower revenue periods. For many businesses, expense management software can streamline this process.

Expense management software acts as a centralized hub for tracking, categorizing, and analyzing periodic expenses, eliminating the need for manual spreadsheets or paper receipts. By automatically importing transactions from multiple sources and categorizing them, these systems provide real-time visibility into spending patterns while significantly reducing data entry and administrative overhead.

Modern expense platforms further streamline operations through customizable approval workflows, automated policy enforcement, and payment automation capabilities that ensure the timely processing of periodic expenses. Integration with accounting systems enables automatic expense reconciliation and budget reporting, giving organizations insights into potential cost-saving opportunities.

Even financially savvy organizations can stumble when managing periodic expenses. Recognizing these common pitfalls before they affect your operation allows for proactive prevention rather than reactive correction.

Treating periodic expenses as surprises

Many businesses are surprised when predictable periodic expenses arrive, creating unnecessary financial strain and disruption. This approach can stem from inadequate forecasting or incomplete financial record-keeping, leading to preventable cash flow challenges.

How to avoid this mistake

Implement a comprehensive annual expense calendar that captures all periodic obligations, regardless of frequency, to prevent periodic expenses from becoming surprises. Additionally, schedule quarterly financial planning sessions specifically focused on reviewing upcoming periodic expenses for the next six months.

Failing to adjust for inflation

Periodic expenses often increase annually, yet many organizations budget based on historical amounts without accounting for these predictable rises. This oversight creates persistent underfunding that compounds over time, generating widening gaps between allocated resources and actual obligations.

How to avoid this mistake

Apply realistic inflation adjustments to all periodic expense projections, using industry-specific inflation indicators rather than general consumer metrics. Carefully review vendor communications for price increases and adjust allocations accordingly. This approach ensures your financial preparations accurately reflect future obligations rather than past costs.

Neglecting partial accruals

Financial disruption occurs when businesses don’t set funds aside for periodic expenses until shortly before they come due. This can create unnecessary pressure during payment periods while missing opportunities to smooth cash flow impacts throughout the year.

How to avoid this mistake

Establish monthly accrual practices that consistently allocate proportional amounts toward all upcoming periodic expenses. Treat these allocations as mandatory financial obligations rather than discretionary transfers. This approach transforms large intermittent payments into manageable monthly allocations.

With Brex’s AI-powered spend management software, periodic expenses don’t need to be time-consuming and disruptive. Brex offers businesses a modern and integrated platform, including treasury accounts, automated bill pay, and global corporate cards, to streamline the periodic expense planning and payment process.

Brex gives businesses access to three different banking accounts, including a high-yield treasury account. Businesses budgeting for periodic expenses can leave cash deposits in Brex’s high-yield account, ensuring that sinking funds still grow over time. And while other high-yield accounts may create cash flow concerns through liquidity constraints, businesses can access deposits in the Brex treasury account with same-hour liquidity.

Brex business accounts are seamlessly integrated into its powerful spend management platform, enabling finance teams to monitor all expenses and cash positions through one interface. Live budgets within Brex give teams real-time financial reports, ensuring that funds are properly allocated for periodic expenses before they’re due.

Once periodic expense invoices arrive, Brex’s automated bill pay transforms a manual, error-prone process into an efficient workflow. Invoices can be forwarded, emailed, or uploaded to Brex and Brex AI then captures each itemized detail, including due date, vendor, and amount. Brex automatically matches those invoices to outstanding purchase orders, automating the invoice reconciliation process.

Brex AI generates payments, which are then routed through custom-built approval flows. This automated process ensures periodic expense due dates are never missed while also taking advantage of any early payment discounts.

Whether you’re looking to get more control over periodic expenses or strategies for reducing business expenses, Brex provides comprehensive solutions to help you gain proper visibility into your financial operations.

Teddy Collins, VP of Corporate Finance at SeatGeek, says: “Brex is helping us control our expenses, as well as be more efficient with our No. 1 resource: our employees. Even a single-digit percentage increase in productivity delivers high ROI.” Mel Nasiri, Billing Account Specialist at Rechat, adds: “Brex has the best business banking account. We can move so much faster with one seamless solution for banking, invoicing, expenses, and AP from Brex.”

Ready to streamline periodic expense management? Sign up for Brex today and join 30,000+ companies using the modern finance platform to spend smarter and move faster.