Billable expense examples range from the cost of communication to materials. Billable expenses is a common term used in business. While making money is one of your biggest priorities, missing out on billable expenses can be like throwing money into the wind. Let’s take a look at what billable expenses are and how you can factor them into your business.
Before we look at billable expense examples, what is billable expense income?
Firstly, billable expense income is any revenue generated in relation to purchases a business makes on behalf of a client or customer. Billable expenses are present in practically any business. These can include shipping costs, supplies purchases, materials or even travel costs. However, if you are not including billable expenses on your invoices, you are likely missing out on a significant amount of billable expense income.
Top 5 Billable expense examples
Payment processing fees are any fees incurred when receiving payments. These charges should be included in your pricing. Does your card machine charge? Does your online portal have payment processing fees? Any payment fees will quickly eat into your profit, so it is essential to keep on top of them.
If your service includes time spent planning, organising or researching, these are billable expenses. For example, if you are a freelance writer, you will need to spend time researching blog post content and topics. If you are a website designer, researching the client’s needs, creating drafts and getting website copyright are all billable expenses. For transparency in billing and accounting purposes, you should include research and planning fees as line items on your invoices.
Communicating with clients
Doing the ‘job in hand’ is just a small part of working with clients. You will also spend a lot of your time communicating with prospective and existing clients. This billable expense goes beyond consultations. If you have a client who calls frequently and unnecessarily, for example, billing them for the time is a good way to make those calls worth your while. While communication with clients should always be tallied as a billable expense, be sure you clearly communicate your policy with them upfront to avoid an unpleasant surprise when they receive your next invoice.
Any business-related travel that must be performed as a condition of completing a job for a client could be considered a billable expense.
Finally, any materials purchased to complete a job for a client can be considered billable expenses. Anything directly related to the work you are performing for them qualifies.
Good business starts with good accounting, and distinguishing billable expense income from your main revenue stream is just another component of accounting best practices. If you’d like some additional support with understanding your billable expenses contact our team today.