Question

Explain the Postponable Cost.

Answer 1

‘Postponable cost’ refers to those expenses that a business can delay or defer without causing immediate harm to its operations. These costs are not urgent and can be rescheduled for a future period, especially during times of financial constraints or low business activity.

Examples of Postponable Costs:

• Staff training programs
• Office renovations or upgrades
• Advertising and promotional campaigns
• Research and development expenditures
• New equipment purchases (non-essential)

Postponable costs are useful in budget planning, especially when a firm needs to prioritize urgent expenses. By deferring these costs, businesses can manage cash flow more effectively in the short term.