Billable expenses are costs you incur that you want to on-charge to your customer. This can be out of pocket supplies, travel or equipment. Anything you incur as an expenses on behalf of a client needs to be invoiced to that client. Xero billable expenses ensure anything you purchase is always invoiced to the client. Meaning you never miss out on revenue!
Timing is everything as you don't want to be out of pocket for these costs therefore negatively impacting your cashflow.
How does it work?
When you enter an invoice from a supplier (or reconcile a transaction in the Bank Account screen) you know have the option to assign expenses to a customer.
Clicking this button then allows you to assign this expense to a customer. You can split each line item to different customers or easily assign all to the one customer.
The next time you Invoice that customer a notification will pop up asking you if you wish to add the billable expenses to this invoice. You then get the option to add all expenses in 1 line item or add them individually.
This will bring in the actual cost of each item. You can of course mark these items up if you want. To do this click on the Unit Price and type *1.2 or whatever markup you want.
It really is that simple. Now you never have to keep a spreadsheet or separate records of things that need to be on-charged or Invoiced to your customers!
How do I know what I've invoiced for?
If you haven't invoiced for something Xero will prompt you next time you invoice the customer.
If you want to know who you need to invoice you have 2 options:
If you click on Accounts > Sales you will see a nice summary of the Customers and amount owing. Clicking on the amount next to each client will generate an invoice for you.
You can also run a Billable Expenses - Outstanding Report. This will give you a breakdown of every item that still needs to be invoiced. This is one of the new reports in Xero so you need to ensure you click Reports > New Reports.
Next Steps
You don't need to turn anything on in Xero to use Billable Expenses, you just need to remember when entering your Purchases (or reconciling via spend money) to click the blue link at the bottom of your purchase.
If you get stuck give Kate or Tanya our resident Xero experts an email or buzz.
