Amortized prepaid expenses are a type of accounting used to spread out the cost of big-ticket items over several years. Instead of taking the entire hit upfront, businesses can spread the expense out to more evenly match the benefit they derive from it. This allows them to maintain better financial health and plan for expected costs in the future. Additionally, this approach also allows companies to deduct the portion of the expense associated with each period in their taxes—a critical consideration when trying to maximize cashflow and stay profitable.