what is a fixed expense? Fixed expense is a cost that occurs regularly and must be paid monthly but it does not change, e.g. rent, mortgage payments, for example, car loans, or subscription. These costs are stable and do not rise or fall with income or volume consumption hence simple to budget. In business, fixed expenses play an important role of stabilising operations in irrespective of the numbers of sales made. Controlling fixed expenses is essential since they should be met regardless of low revenue that may impact the cash flow if not tracked properly.
