Having aligned all your monthly outgoings as noted in Cash Flow Management – Part 1, there is still some improvements to be made.
Annual costs
Some costs like insurance & professional associations can be paid annually.
Much like the monthly systems, these are all paid together at the same time each year.
Again, it makes cash flow management easier – although admittedly one month is a little tighter than the others.
Individuals
The tax year runs from 6 April to 5 April each year.
I thus have my insurance and other annual costs all due on the 15th of April so the costs align nicely with the year and no accruals or prepayments are needed.
Companies
Companies have different year ends. Much like an individual, my annual costs start a few days after the company financial year starts.
Benefits
Aligning monthly outgoings has massive benefits.
Aligning annual outgoings also have benefits – although admitted not nearly to the same extent as monthly. This would be a nice to have and is worth considering and implementing.
