Invoicing is a huge part of any business. This has probably already become your monthly or weekly routine in order to collect your hard-earned payment from customers. But are you including all the expenses?
Performing your business actions regularly and legally is of crucial importance. That is why you need to be aware of which expenses need to be invoiced and what you need to pay extra attention to. The following list of expenses can serve as a helpful reminder that will keep your business protected and your relationship with the clients professional.
Agree in advance
If you don’t want to deal with angry or awkward conversations and enter in long-lasting discussions, you should set the rules in advance.
Clearly and directly discuss what kinds of expenses will be covered. This will save you a lot of nerves and financial worries. Not to mention that it will help you to present yourself as a real professional.
You can also add your own expensing clause in your contract. If there is any doubt on your mind – ask.
This is crucial for creating a complete invoice which will protect both you and the client. In addition, you will establish yourself as a trustworthy and reliable business owner.
Think from the client’s perspective
Apply common sense by viewing the expenses from your client’s perspective.
For every expense you plan to add, ask yourself the following questions:
Would they consider it a reasonable expense? Would I be willing to pay for that as a client?
Some business owners tend to make the mistake of only thinking about the money they can earn if they add some unreasonable expenses. Even if you can somehow justify that expense, if it’s not a necessity, don’t include it.
While some clients are gullible, others aren’t and can easily see through any scam.
You shouldn’t risk portraying yourself as someone who will take advantage of the client’s trust. Establishing a long-lasting relationship is much more fruitful then earning a little extra money.
Pay attention to details
After you have agreed on what should be invoiced, it is time to get down to details.
Even if you have already agreed on which expenses should be included, make sure to itemize and validate every expense that you can.
No matter how many expenses you will list, always include an expense report. It should also include an image of the receipt. In this way, you will have indisputable evidence that supports every listed item.
Besides the fact that your client probably needs these details for their own accounting and tax purposes, this will also protect your business from any accusations.
When you add detailed reports and explanations for every expense, no one will be able to undermine your decisions. In case you want to have these details nicely and professionally written, you can always find some top writers to help you out.
Ultimately, transparency will leave no room for complaints.
Expenses you should always pass on
What expenses you will add to your invoice depends on the type of business you run and the type of service you provide. That is why you should always use the above-mentioned tips which will help you to determine these expenses.
However, there are some things that business owners tend to overlook when composing an invoice. Some of such costs are:
Travel costs
If your work requires traveling, you should bill for that cost in your invoice. There is no reason why this should come out of your pocket because you’ll be doing this during your business hours.
To avoid any misunderstandings, make sure to mention that this will be added to expenses. In case they seem reluctant, explain to the client that the traveling takes you away from working on other projects.
Consulting fees
Any new project demands a lot of communication in order to clearly determine all the facts concerning the business process.
Some businesses offer a free initial consultation which you can apply too. However, any further consultation should be charged.
It’s crucial that you explain this to your client because otherwise, you will lose valuable time which you could’ve invested in other clients.
Research
Every minute you spend doing research for your client should be billed. Why shouldn’t you get paid for the hours you spent in front of the computer screen in order to fulfill the client’s wishes?
If you want to have evidence of the time you spent on researching, use a time-tracking app. This handy app will prove how much time it cost you and the client won’t be able to disagree.
Supplies
The specific items you use for the client’s project, especially those you used in large amounts, should also be billed. Even if those supplies include something basic as paper for printing.
Of course, you shouldn’t charge them for office supplies which are part of day-to-day operations, but any extras should be invoiced.
Mailing costs
When you need to ship items that can’t be handled electronically, mailing costs such as postage and shipping should be added to the invoice.
Also, include the cost for the supplies you used for packing. These are all the costs that should be passed on.
Conclusion
Always be aware that as a business owner, you deserve to be paid for every minute of your hard work. In order for others to respect you and your services, you should have the right attitude with the clients from the very start. All the tips and important expenses mentioned above will help you to righteously reimburse your efforts.
As long as you discuss with your client every detail, include supporting evidence of your work, and include every expense which occurred during the business process, you’ll have no trouble with composing invoices which both sides agree on.
Daniela McVicker
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