Reimbursable Expenses
Out-of-pocket costs you incur on a client's behalf and bill back to them, usually with receipts attached.
Definition
Reimbursable expenses are costs you pay out of pocket while doing client work that the client has agreed to pay back. Common examples for freelancers and agencies include travel to a client site, stock photos or fonts licensed for a project, shipping, print runs, and software purchased specifically for one engagement. They are distinct from your normal overhead—your own laptop and office rent are your costs, not the client's.
In practice, reimbursables are billed as separate line items on your invoice, usually with receipts attached, either at cost or with an agreed markup for handling. The critical step happens before you spend: your contract or statement of work should define which categories are reimbursable, whether pre-approval is required above a threshold, and how they will be documented. Expenses billed at pure cost are generally not income to you in any meaningful sense, but they still need to flow through your books correctly so revenue and costs both get recorded.
Why It Matters
Untracked reimbursables are a slow leak in your margins. A $40 stock image here and a $150 rideshare there feel too small to chase, but across a year of client work they can quietly add up to thousands of dollars you absorbed for someone else's benefit. A simple habit—log the expense to the project the day you incur it—is the difference between recovering that money and donating it.
The contract side matters just as much. Clients dispute surprise expenses, not documented ones. When your agreement names the reimbursable categories and your invoice shows itemized expenses with receipts, reimbursement is routine; when expenses appear unannounced on a final invoice, you have handed the client a reason to delay paying the whole thing.
Examples
- 1
A consultant flies to a client kickoff and adds $640 of airfare and hotel costs to her next invoice as itemized reimbursable expenses with receipts attached.
- 2
A design agency licenses $300 of stock photography for a campaign and bills it back with a 15% handling markup, as specified in the contract.
- 3
A freelancer forgets to log small project purchases for six months and realizes he absorbed roughly $1,800 in client costs he never invoiced.
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