Amortizing prepaid expenses is an accounting process used to lessen the impact of irregular expenses over a period of time. In other words, it’s a way of spreading out payments for products or services you’ve already paid for in advance across the duration of the service. This method allows businesses to maintain more consistent accounting practices and budgeting forecasts. It also helps maximize cash flow by utilizing existing funds rather than making additional payments. Amortizing prepaid expenses is a smart and efficient way to manage financial resources and maintain fiscal discipline while still taking advantage of discounted rates or service packages with long-term benefits.