Most professionals incur and bill costs to clients including travel, hotel, auto and other direct expenses associated with the performance of specific services. No universally accepted presentation format exists for billing costs and expenses – a conclusion reached after speaking with hundreds of professionals over a period of twenty years. The preferences of the individual practitioner and his or her relationship to the client determine the time and billing software – expense presentation. The presentation can vary from one client to the next within the same firm. Effective time and billing software expense management provides users with presentation flexibility when billing expenses to clients.

Time and Billing Software – Expense Presentation – Typical Examples

The most common format presents expenses in date order at the bottom of the invoice, or shown in summary total. Sometimes the summary presentation displays a listing of expenses by expense type rather than each individual expense, or one grand total.  The expenses usually follow a narrative description listing the principal services provided, or a detailed listing of the time incurred. However, some invoices include expenses without time charges. Please review the following expense invoice example created using ImagineTime software:

Time and Billing Expense Presentation - expenses summarized by type

Time and billing invoice – expenses summarized by type

Another less common presentation intermingles expenses and slips in date order for invoices showing limited line item detail. This method is often used by forensic accountants and attorneys. Some accounting firms also use this method for their general billing presentation. I have found that accountants accustomed to using Sage “Time Slips” often prefer this detail presentation.

For example, when billing detailed time slips which display dates, times and amounts, expense items can be intermingled with the time slips without much differentiation. The factors distinguishing between slips and expenses would only appear if you choose to display time slip rates and hours, and possibly, the nature of the item description. However, when you suppress display of hours and rates, it becomes difficult to distinguish between a time slip or an expense. Some practitioners prefer this approach:

Time and Billing Expense Presentation - detail expense presentation

Time and Billing invoice – detail expense presentation

Billing of Hybrid Expenses

What if you want to bill the client for an expense that represents the recovery of a fixed cost? Tax software is a good example – the cost per return declines as the number of prepared returns increases. In that case, it is not practical or desirable to enter an expense item for each client. For example, consider a firm that provides “audit insurance” or charges an asset management fee. Billing software should track a line item for a specified amount whether entered as an actual expense or not.

Ensure that your software lets choose the expense presentation rather than imposing the choice on you!

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