What Are Recurring Expenses?

Recurring expenses are foreseeable costs that help you run your business smoothly. They come due on a monthly or yearly basis. Identifying such expenses is necessary to create a budget plan and ensure you have sufficient funds to perform your financial obligations.

Suppose you own a marketing agency in downtown Chicago, where you need to pay $3,000 in office rent every month. Now, this isn’t something that is part of your business revenue, so no matter what your net revenue is, you need to pay $3,000 to continue operating your business from the office in Chicago. Here, the rent payment collected every month is classified as a recurring expense.

Following the recurring expenses definition, let’s check out what examples of recurring expenses are.

Examples of Recurring Expenses

Below are some recurring expenses examples that businesses usually encounter:

1. Utility Bill:

Electricity, or internet bills that are much-needed to operate your daily activities, are recurring expenses.

2. Business Insurance:

Insurance premiums you pay to shield your business from unwanted liabilities are referred to as recurring costs.

3. Marketing Cost:

If you have hired a marketing agency to advertise your services, you need to pay monthly charges, which are recurring costs.

4. Subscription Fees:

In case you have tools like design tools or HRM software, the money you pay regularly is a recurring expense.

5. Office Rent:

Lease payments for office space are an essential part of business operations and count as recurring expenses.

6. Employees’ Wages:

The paychecks you give to the employees every month also fall under recurring expenses.

What Are Non-recurring Expenses?

Non-recurring expenses are only one-time costs that come out of nowhere and are not tied directly to your business operations. Non-recurring costs have nothing to do with your business’s daily activities, but still, you need a future-proof financial plan to tackle them if they pop up.

Let’s say your newly-launched startup hires a software developer. Now, you need an advanced laptop worth $3,500 for a newbie, so they can contribute to your ongoing project work. This one-time purchase of $3,500 goes directly to the non-recurring expense category. The payment you made isn’t going to come due again, and therefore, the cost of a laptop is considered a non-recurring expense.

Examples of Non-recurring Expenses

Here are a few expenses that can be counted as non-recurring.

1. Penalties:

Unwanted fines due to tax delays or regulatory violations come under non-recurring expenses.

2. Equipment cost & repairs:

Costs incurred for purchasing new equipment or for its repair are also referred to as non-recurring expenses.

3. Office relocation:

The one-time cost you pay for shifting your office from one location to another is a non-recurring expense.

4. Professional fees:

Paying for availing services like auditing or consulting from professionals is part of non-recurring expenses.

5. Occasional events

The cost of hosting a dinner for your team following the achievement of a milestone is also a non-recurring expense.

Nonrecurring vs. Recurring Expenses

Discover how recurring and nonrecurring expenses are two different sides of the same coin.

Track Your Recurring and Non-Recurring Expenses With Moon Invoice

Whether it is recurring expenses or non-recurring expenses, you can manage all with Moon Invoice. Unlike manual expense tracking, you only need a few clicks when it comes to tracking recurring expenses or non-recurring expenses. How? Here’s the detailed explanation.

1. Record an Expense

Soon after you log in to Moon Invoice, start storing expense receipts digitally instead of making handwritten receipts on paper. Vendor name, currency, date, payment method, and necessary documents are a few things you need to enter whenever you create an expense receipt. Here are the quick steps you need to follow.

• Launch Moon Invoice App
• Purchases > Expenses
• Click on the “Create an Expense” button or the “+” icon
• Include necessary details, along with required documents
• Save changes to record the expense.

Similarly, you can add as many expense receipts as you want and centralize your business spending in a single invoicing platform.

2. Generate Expense Report

No matter how many expense receipts you save, you can generate a comprehensive expense report in a couple of steps. For that, you need to go to the “Reports” tab from the main menu and find the expense report under “Purchases & Expenses”. By tapping on it, you can see all expense reports on a single screen.

3. Track Recurring or Non-recurring Expenses

Once the expense report is ready, you can use the smart filtering option to find the desired expense record. You can either choose date-wise or category-wise filter options to quickly get recurring or non-recurring expenses. If required, you can also search expense records by vendor’s name.

Conclusion

Simply put, recurring expenses are consistently occurring costs associated with your business activities. Whereas, non-recurring ones come out of nowhere and are not linked with any operations. Knowing the difference between these two is as important as sketching out your financial plan. After all, they offer a bigger picture of your business’s financial health.

Adopt tools like Moon Invoice and start managing recurring expenses without any extra effort. It not only lessens your administrative burden but also centralizes your tax data, helping you cope with the tax season with ease. Ditch paper-based receipts and embrace Moon Invoice by grabbing a free 7-day trial.

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