How to Handle Additional Invoice Charges and Reimbursable Expenses

Your business may have miscellaneous charges that you need to add to a customer’s invoice. You may also have charges that you want to set up as reimbursable expenses. These additional charges on an invoice help account for costs beyond the primary labor, services, parts, or materials provided.

Examples of Additional Charges on an Invoice

Common examples of additional charges include:

• Lifting or crane fees: Charges incurred on behalf of clients that you pass along to the customer.
• Miscellaneous labor, materials, and parts: Additional costs associated with completing a job.
• Setup fees and service charges: Charges for preparing equipment, setting up a service, or performing additional work.
• Shipping, freight, and delivery charges: Costs associated with transporting parts, materials, or equipment to a customer or job site.

Each charge should have a clear description so customers understand what they are paying for. When preparing invoices, make sure the charges reflect the work performed, the costs incurred, or the terms agreed upon with the customer.

What Is a Reimbursable Charge?

A reimbursable charge is an expense your business incurs on behalf of a customer and then bills back to that customer. For example, you may need to obtain a permit from the appropriate authority before performing work at a customer’s location. You pay for the permit, then pass the cost along to the customer, possibly with a markup.

Tracking these expenses against the jobs they belong to helps you understand the actual cost and profitability of each job. Your job costing process should account for the costs associated with the work, including expenses that are billed back to customers.

How to Handle Additional Charges on an Invoice

When adding additional charges to an invoice, use a clear description and enter the appropriate amount. If the charge varies depending on the job, calculate the amount for that specific invoice rather than relying on a fixed default.

For reimbursable expenses, keep the original cost and the amount billed to the customer documented. This makes it easier to review the expense, explain the charge if a customer asks about it, and evaluate job profitability.

Also, make sure any additional fees are consistent with your agreement with the customer and applicable laws. For example, the Federal Trade Commission’s guidance on unfair or deceptive fees explains disclosure requirements for businesses covered by its rule, including sellers of live-event tickets and short-term lodging.

For service contractors, accurate invoicing means accounting for the work performed and the additional costs associated with it. Field service invoicing software can help organize charges and connect invoices to completed work, making it easier to bill customers accurately.