As a business owner, it can be hard work to keep track of all your expenses. However, without a proper way to track your expenses, including your billable ones you could see your company considerably out of pocket. But, when it comes to expenses there are two main types, business expenses and billable ones.
In this post we will discuss what a billable expense is and how you can use accounting software to keep track of all these, so you don’t need to lose out on money.
What is a Billable Expense?
A billable expense is any money that has been spent on behalf of a client which then needs to be paid back. For example, if you are building your client a new website and have bought the domain name from your company funds for them to then pay back, this would be a billable expense.
Anything that isn’t directly for the client such as stationery for your office, building rent or anything along those lines are classed as business expenses.
Why is Keeping Track of Billable Expenses a Challenge for Businesses?
When it comes to tracking business expenses this is reasonably simple. You pay for the item; you keep the receipt/invoice, and you declare it at your annual tax assessment. However, with billable expenses, it becomes more complicated. Make sure you write these expenses into the client’s contract to agree on how they will pay for these expenses. If it is in writing, in an official document, it is harder to dispute.
These expenses could range from a software license to a physical object. Whatever the expense is, if it is for the client you want to make sure they cover these expenses so that you aren’t doing business at a loss.
The reason why billable expenses are more complicated and often challenging to track is due to the number of steps involved in the process. These include:
- You (the company) receive a quote for the item/service
- Client agrees to pay for this (in writing)
- You receive an invoice and initially pay for it
- You then send an invoice to the client to pay back
- Client pays back money
As you can see, there are a lot of steps involved, and when you multiply these steps by the number of active clients you currently have, you can see how this can become challenging to keep track of.
From deciding what expenditures, you are passing on to your clients, to how you are going to do this, there is a lot of work involved. Keeping track of all of them can be a challenge. Therefore, it makes sense to try and simplify this task to make your life easier and that little bit less stressful.
How Can Businesses Streamline and Simplify Keeping Track of Billable Expenses?
The answer is, a good accounting software, such as Exchequer. This software is designed to streamline the large majority of all your financial tasks, freeing up your time to focus on other tasks. As a fully integrated system, you can see what expenses haven’t been reimbursed by the client, which have recently been added and how much you are currently owed in total.
Investing in good accounting software not only gives you back some precious time during the day, but it can also increase your finance department’s efficiency. To help you out we recently wrote a useful piece on the 5 things to consider whilst choosing the right accounting software for your business.
How Minerva Can Help
With over 30 years of experience behind us, we can help your business grow and evolve with the latest technological solutions to save you time, money and resources. From accounting software to cyber security we have access to a wide array of business software to help solve many business challenges.
We believe in creating business solutions that streamline processes to make your company’s life easier. From our fast integration into your existing systems to our comprehensive support team, we can create a specialised business software package tailored to your company’s requirements.
Contact us today to find out how we can help improve your processes with accounting software amongst many other packages.