What is a Postponable Cost?

A postponable cost is an expenditure that can be delayed to a future date without having a notable impact on short-term results. Managers focusing on short-term results are more likely to target postponable costs as part of their budgeting programs. These costs are usually reduced first when a business suffers a decline in revenue.

Examples of Postponable Costs

A number of costs may be considered postponable, including the following:

Advertising. When a business spends money on general recognition advertising, it may be able to hold off on these expenditures for a period of time. However, promotions and other advertising that are intended to boost sales during specific periods or for specific products should not be considered postponable costs.
Employee training. When employees are scheduled for general training, such as safety awareness, it may be possible to delay these expenditures for a period of time. This is not the case for training that is targeted at specific job skills, where employees must complete the training before they can perform certain value-added tasks.
Facility repairs. When a business engages in repetitive maintenance, such as re-painting a building, it may be possible to postpone the expenditure. This is not the case for critical repairs that must be made to avoid facilities and equipment from not functioning.