Can I invoice clients for reimbursable expenses in the US?

Can You Invoice Clients for Reimbursable Expenses in the US?

Yes—you can usually invoice clients for reimbursable expenses in the United States, and it’s extremely common across consulting, creative services, agencies, contractors, freelancers, and many other service businesses. Reimbursable expenses (often shortened to “reimbursables” or “rebillable expenses”) are costs you pay while doing a client’s work that the client agrees to pay back. Typical examples include travel, mileage, parking, shipping, printing, subcontractor costs, software or stock assets purchased for a specific project, and certain permit or filing fees.

That said, “can I invoice it?” is only the beginning. The more important questions are: what counts as reimbursable, how should it appear on an invoice, what documentation should you keep, how do taxes and sales tax factor in, and how do you avoid disputes or delayed payments? Invoicing reimbursable expenses can either be smooth and profitable—or an ongoing headache—depending on your policies and how clearly you communicate them.

This guide walks through how reimbursable expenses typically work in the US, practical ways to bill them, and how to structure invoices so clients understand and pay promptly. It also covers common pitfalls, including misunderstandings about markup, per diem vs actual costs, and the difference between pass-through expenses and taxable charges.

What Are Reimbursable Expenses?

Reimbursable expenses are out-of-pocket costs that you incur while delivering a client’s project, and that the client has agreed to repay. The key words here are “out-of-pocket” and “agreed.” If you spend money that wasn’t approved (or wasn’t contemplated by your agreement), the client can reasonably push back—even if the expense seemed necessary to you.

In many service businesses, reimbursables exist because it’s inefficient or impossible for the client to pay every micro-cost directly. Instead, you pay the vendor and then invoice the client with a clear description and proof. This keeps the project moving, but it requires good invoicing practices.

Here are common categories of reimbursable expenses:

Travel costs: airfare, hotel, rideshare, rental cars, parking, tolls, baggage fees, and sometimes meals if that’s in your policy.

Mileage and vehicle use: when you drive your own car to a job site or client meeting. Mileage billing is often based on a per-mile rate rather than itemized gas receipts.

Shipping and delivery: postage, courier services, freight, packaging materials, and insurance for high-value deliveries.

Project-specific purchases: printing, event fees, props, hard drives, domain names, stock photos, fonts, or other assets purchased specifically for that client.

Third-party services: subcontractors, translators, specialized consultants, lab testing, or filing agents (when permitted by your agreement).

Administrative fees: not always reimbursable, but some contracts allow reasonable copying, notary, or permit-related costs.

Some costs are not usually considered reimbursable unless explicitly agreed, such as your general overhead (your laptop, rent, phone plan, standard software subscriptions, utilities, or typical office supplies). Clients often assume those are baked into your rate.

Reimbursable vs. Billable: Why the Distinction Matters

It helps to separate expenses into two buckets: costs that are part of your normal operating overhead and costs that are truly client-specific. Normal overhead is typically covered by your hourly rate, retainer, or project fee. Client-specific costs are the ones most likely to be reimbursable.

If you blur the line, clients may feel like they’re being “nickel-and-dimed,” or they may suspect you’re double-charging. A clear policy reduces friction. It also allows you to price your services more confidently: you can keep your professional fees focused on your labor and expertise, while reimbursables cover the necessary outlays.

Another reason the distinction matters: clients may treat reimbursable expenses differently inside their accounting systems. Some companies require receipts and approvals for reimbursements, while professional fees may go through a different approval chain. Making reimbursables clear and separate can actually speed up payment because the invoice is easier to code and approve.

How to Set Reimbursable Expense Terms Before You Start Work

The smoothest reimbursable invoicing happens when you set expectations before the project starts. You don’t need a 20-page legal document to do this, but you should put the basics in writing—your contract, statement of work, engagement letter, or even a signed email that lays out key terms.

Here are the most useful terms to define:

1) What expenses are reimbursable. List categories and include a few examples. If meals are reimbursable only when traveling overnight, say so. If software purchases must be pre-approved, say so.

2) Approval thresholds. Many businesses use a simple rule such as “pre-approval required for any single expense over $200” or “over $500.” This avoids surprises and keeps clients comfortable.

3) Actual cost vs markup. Decide whether you bill reimbursables at cost (exactly what you paid) or with an administrative markup (for time spent purchasing, coordinating, and accounting). Markups are common in some industries, but they must be disclosed clearly to avoid disputes.

4) Per diem vs receipts. For travel and meals, some clients prefer a per diem (a daily allowance) rather than collecting every receipt. Per diems reduce paperwork but must be agreed in advance.

5) When reimbursables are invoiced. You can invoice as they occur, monthly, or at milestones. For long projects, billing reimbursables monthly keeps your cash flow healthier.

6) Payment terms and late fees. If your invoice is net 15, net 30, or due upon receipt, state it. If late fees apply, state that too (where permitted).

7) Required documentation. Some clients require copies of receipts. Others are fine with a detailed description. Align with the client’s internal policy.

Setting these terms upfront protects your relationship. If a reimbursable expense is challenged later, you can point back to agreed terms rather than debating what is “fair” after the fact.

How to Invoice Reimbursable Expenses: Common Methods

There are several standard ways to invoice reimbursables. The best choice depends on your industry, client preference, and how frequently reimbursables occur.

Method 1: Add Reimbursables as Separate Line Items on the Invoice

This is the most common approach. Your invoice includes your professional service lines (hours, project fee, retainer drawdown) and separate lines for each reimbursable expense. Each line includes a clear description, the date, quantity (if relevant), and the amount.

For example, instead of writing “Travel: $842,” break it down into:

Airfare (Client site visit) – Jan 12 – $420

Hotel (2 nights) – Jan 12–14 – $310

Parking (Client site) – Jan 13 – $32

Mileage (48 miles @ agreed rate) – Jan 13 – $80

Granularity reduces questions. It also makes it easier for the client to match your charges to their travel policy.

Method 2: Use an “Expenses” Section or Subtotal

Some clients want a cleaner invoice. You can group expenses under an “Expenses” heading, list the lines there, and subtotal that section separately from labor. This helps the client see how much of the invoice is services vs reimbursables at a glance.

This approach is especially effective when your invoice includes many hours and multiple projects but only a few reimbursables. It keeps everything organized and reduces the chance that a busy reviewer misses the reimbursable lines.

Method 3: Invoice Reimbursables Separately

If reimbursables are large or frequent—common in construction, production, field services, or event work—you might invoice them separately from service fees. For example, you could issue a weekly expenses invoice and a monthly services invoice.

This can reduce confusion and speed approval because the invoice is “pure reimbursements.” It also helps with cash flow if you’re fronting significant costs.

The downside is administrative overhead: two invoices to track. Your workflow should make it easy to issue and reconcile both.

Method 4: Require an Expense Retainer or Deposit

If you expect high upfront costs (for example, travel, equipment rentals, or materials), it may be reasonable to require an expense deposit before you spend money. The deposit can be applied to reimbursables as they occur, and any unused portion can be refunded or credited.

This reduces the risk that you’re funding the client’s project out of your own pocket. Many clients understand and accept this when the numbers are significant and the logic is clearly explained.

What to Include on an Invoice for Reimbursable Expenses

To get reimbursed quickly and avoid back-and-forth, your invoice should be “approval-ready.” That means it contains enough detail for the client to understand what the expense was, why it was necessary, and that it aligns with your agreement.

At minimum, include:

Date of the expense: helps match to receipts and travel itineraries.

Description: what it was and why it relates to the project (briefly).

Category: travel, shipping, materials, subcontractor, filing fees, etc.

Quantity and rate (when applicable): mileage and per diem work well with quantity x rate.

Amount: what you’re charging.

Tax treatment (if relevant): depending on your state and the expense type, some lines may be taxable and others not. If you collect sales tax, show it clearly.

Receipts (if required): either attached, provided upon request, or stored for recordkeeping depending on your client’s policy.

Also consider adding a short invoice note such as: “Reimbursable expenses billed per agreement; receipts available upon request.” This can reduce follow-up emails without cluttering the invoice body.

Should You Attach Receipts to the Invoice?

There’s no universal rule in the US that says you must attach receipts to invoice reimbursables. It depends on your agreement and the client’s internal controls. Many companies do require receipts for travel and certain purchases, especially if their finance team is strict or if they need documentation for compliance.

Even if receipts are not required, it’s wise to keep them. A client may request proof weeks or months later, and you’ll want to provide it quickly. Good recordkeeping is also helpful for your own accounting and tax preparation.

Best practice: keep digital copies of receipts (photos or PDFs) in an organized folder system by client and month. If your invoicing workflow allows, you can store expenses with attachments so they’re ready whenever you need them.

At Cost or Marked Up: What’s Normal?

Most clients expect reimbursable expenses to be billed at actual cost—meaning you charge exactly what you paid. That’s often the default assumption unless you state otherwise.

However, markups do exist. Some businesses charge a percentage markup on certain reimbursables to cover handling, procurement time, financing, risk, and administrative effort. For example, a production company might mark up equipment rentals or a contractor might add a handling fee to materials procurement.

If you plan to mark up reimbursables, the key is transparency. Your policy should state:

Which expenses are marked up (all reimbursables, only materials, only third-party services, etc.).

The markup method (percentage, flat fee, tiered handling).

How it will appear on invoices (separate “handling” line vs included in the line amount).

Avoid surprising clients with a markup after they expected at-cost reimbursement. Surprises slow down payment and can harm the relationship.

Mileage, Per Diem, and Other Standardized Expense Billing

Some reimbursables are easier to bill using standardized rates rather than trying to track every micro-cost. Two common examples are mileage and per diem.

Mileage Billing

Instead of charging for gasoline receipts, many service providers bill mileage using an agreed per-mile rate. This simplifies invoicing and reflects overall vehicle costs (fuel, wear and tear, maintenance). The important part is agreeing on the rate in advance and documenting your miles (date, starting point, destination, and purpose).

When you invoice mileage, list it as quantity x rate, such as “Client site travel mileage – 48 miles @ $0.XX/mile.” Include the date and purpose.

Per Diem Billing

Per diem is a daily allowance for travel costs (often meals and incidentals, sometimes lodging). Some clients prefer per diem because it reduces paperwork. Others prefer actual receipts because it aligns with their policy.

If you use per diem, document the travel dates and what the per diem covers, and list it clearly on the invoice: “Per diem – 3 days @ $X/day (meals & incidentals).”

Per diem works best when the client explicitly approves it. If they did not, they may reject it and ask for receipts instead.

Sales Tax and Reimbursable Expenses

Sales tax rules in the US vary significantly by state and sometimes by local jurisdiction. Whether you need to charge sales tax on reimbursable expenses depends on several factors, including what you’re selling (service vs tangible goods), where the client is located, where the work is performed, and how your state treats “pass-through” expenses.

In some cases, reimbursable expenses are considered part of the taxable sales price when they are directly connected to a taxable transaction. In other cases, they may be excluded if they are truly a pass-through and separately stated. The details can get technical quickly.

Practical guidance for many small service providers:

Keep reimbursables separately stated. If they are listed as separate line items, it’s easier to apply the correct tax treatment and easier for the client to understand.

Know your state’s rules. If you operate in a state where services are taxable or where shipping/handling is taxable, your reimbursables might be taxed too depending on how they’re billed.

When unsure, get professional advice. A local accountant or tax professional can quickly tell you how your state treats these items, especially if you bill a mix of services and tangible goods.

Be consistent. Inconsistent tax treatment is a common trigger for client questions and can complicate your bookkeeping.

If you are not registered to collect sales tax, you typically should not add sales tax lines. But that doesn’t mean taxes are irrelevant—your business still needs to keep accurate records and follow your state requirements.

Income Taxes and Deductibility: What Changes When You Get Reimbursed?

Business taxes and reimbursables can be confusing, especially for freelancers and small business owners. A simple way to think about it is this: reimbursed expenses generally aren’t meant to increase your profit, because they’re a repayment of money you spent for the client. But how you record them matters.

Many businesses track reimbursables as expenses and the reimbursements as income (or as a reduction of expense), depending on accounting method and preference. Either way, the goal is accurate books that reflect the reality: you spent money, then you were repaid.

From a practical standpoint, you should:

Record the original expense with enough detail (date, vendor, category, and which client it relates to).

Match the reimbursement to that client and invoice so you can prove the expense was business-related and not personal.

Keep receipts in case of questions from the client or for your own tax documentation.

Because tax treatment depends on your entity type (sole proprietor, LLC, S-corp, etc.) and accounting practices, it’s smart to maintain clean records so your tax preparer can handle it correctly.

Best Practices to Avoid Disputes and Late Payments

Reimbursable expenses are one of the most common sources of invoice delays. Not because clients don’t want to pay, but because expense approvals often require extra steps. Here are practical ways to minimize friction:

Get Pre-Approval for Large or Unusual Expenses

If an expense is outside the ordinary—an expensive flight, a rush fee, a specialty purchase—get written approval. A quick email like “Confirming approval for X at approximately $Y” can save you from a rejected invoice later.

Use Clear Descriptions that Connect to the Project

“Uber” can be questioned; “Rideshare to client office for on-site workshop” is much less likely to be challenged. You don’t need to write a novel—just enough to show it’s legitimate.

Separate Expenses from Labor

Mixing reimbursables into a single line like “Project work including expenses” is a recipe for confusion. Separate line items make approvals easier and help the client allocate the costs correctly.

Invoice Expenses Promptly

If you wait until the end of a three-month project to invoice reimbursables, the client may not remember what the expenses were, and your cash flow suffers. Regular invoicing reduces both problems.

Keep Documentation Ready

Even if you don’t attach receipts every time, keep them organized so you can respond quickly if asked. The faster you can provide documentation, the faster your invoice gets approved.

Use Consistent Categories

Clients like consistency. If you call it “Travel” one month and “Transportation” the next, the client’s accounting team may have to guess how to code it. Standard categories reduce internal friction.

Common Reimbursable Expense Scenarios (and How to Handle Them)

Scenario 1: The Client Wants You to Travel for a Meeting

Before booking anything, confirm the client’s travel policy: do they require economy airfare, specific hotels, or booking through a preferred portal? If you book outside their policy, they may refuse reimbursement or request changes.

On the invoice, list travel lines clearly and attach receipts if required. If the client uses per diem, show the per diem calculation. If you used actual receipts, show itemized totals.

Scenario 2: You Need to Purchase a Project-Specific Asset

For example, you purchase stock photos or a plugin needed for the client’s website. Confirm whether the asset should be licensed under the client’s name, and whether the client wants the login or license transferred.

Invoice the expense as a line item with a brief description: “Stock photo license for homepage hero image.” If the license is transferable or has renewal costs, note that separately so there’s no confusion later.

Scenario 3: You Hire a Subcontractor

Many service providers hire subcontractors for specialized tasks. Whether that cost is reimbursable depends on your agreement. Some businesses include subcontractors in their professional fee; others pass them through as reimbursables.

If passing through, clarify whether you charge at cost or with markup, and whether the client has approval rights over subcontractors. On the invoice, list the subcontractor service in a clear way, and consider attaching the subcontractor invoice if the client requires it (while being mindful of confidentiality and your subcontractor agreements).

Scenario 4: Shipping Materials to a Client

Shipping can be straightforward if you list the carrier, the date, and what was shipped. If you used expedited shipping, note that it was requested or necessary for the timeline. Many disputes happen when clients see a rush fee they weren’t expecting.

How to Structure Reimbursables Inside Invoice24

When you use a modern invoicing workflow, reimbursables don’t have to be complicated. A reliable invoicing system should let you separate expenses from services, keep descriptions clean, and provide an organized invoice your client can approve quickly.

Invoice24 is designed to handle the practical realities of billing—especially when you need to include reimbursable expenses alongside your professional fees. The goal is simple: create invoices that are easy to understand, professional to review, and fast to pay.

Here’s a workflow you can follow inside Invoice24-style invoicing:

1) Create Clear Line Items for Each Expense

Add reimbursable expenses as their own invoice lines rather than bundling them into a single total. Use descriptive labels and include dates. This supports approvals and reduces questions.

2) Group Expenses Under Their Own Section

If your invoice contains multiple service lines, group reimbursables together so clients can quickly see the breakdown: services subtotal, expenses subtotal, and the final total.

3) Track Expense Notes Internally

Even if you don’t show all details on the invoice, store notes for yourself: receipt location, approval email, or project reference. That way, if the client asks later, you can respond immediately.

4) Keep Terms Visible

Add a short line in your invoice terms such as “Reimbursable expenses billed per agreement” and include your payment terms (net 15, net 30, etc.). Clear terms reduce payment delays.

5) Use Consistent Categories for Easy Reporting

Over time, consistent categories help you see patterns: which clients generate the most travel, which projects incur more shipping, and whether your pricing structure needs adjustment.

Do You Need to Itemize Every Expense?

Not always. Itemization is ideal when expenses are numerous or when the client is strict. But if you have many small expenses, you can strike a balance: group by category and provide a summary, while keeping supporting details available upon request.

For example, rather than listing ten parking charges separately, you might include one line: “Parking (client site visits) – Jan 1–15 – $86,” provided that the client’s policy allows it. If not, list each one individually.

The best practice is to match the client’s internal requirements. Some clients need each receipt for compliance; others just need a reasonable explanation and total.

How to Handle Reimbursables When the Client Is Late Paying

Late payment is especially frustrating when it includes reimbursements—because you already paid those costs. To reduce the risk:

Invoice reimbursables more frequently rather than letting them build up.

Use an expense deposit for projects with major upfront costs.

Set clear payment terms and follow up promptly when an invoice becomes overdue.

Consider pausing discretionary spending (like optional travel or purchases) if invoices remain unpaid, and communicate professionally about it.

In many cases, clients aren’t refusing to pay—they’re waiting for internal approvals. A clean invoice with clear documentation can shorten that cycle.

Reimbursable Expenses and Client Relationships

How you handle reimbursables can influence how clients perceive your professionalism. If your invoices are unclear or inconsistent, clients may feel uneasy even if your work is excellent. On the other hand, well-structured reimbursable billing builds trust: clients see that you’re organized, transparent, and fair.

Trust also works both ways. If a client repeatedly challenges legitimate reimbursables or takes an excessive amount of time to reimburse expenses, you may need to adjust your policies—such as requiring prepayment for travel, tightening approval thresholds, or revising your contract terms for future work.

Checklist: Reimbursable Expense Invoicing Done Right

Use this checklist to make reimbursables simple and predictable:

✔ Define reimbursable categories in writing

✔ Set approval thresholds for larger purchases

✔ Decide whether you bill at cost or with a disclosed markup

✔ Choose receipts or per diem for travel (and agree in advance)

✔ Separate expenses from labor on invoices

✔ Use clear descriptions tied to the project

✔ Invoice expenses regularly to protect cash flow

✔ Keep receipts and documentation organized

✔ Apply consistent categories and tax treatment

Final Thoughts

Invoicing clients for reimbursable expenses in the US is not only allowed—it’s a standard, practical way to handle the real costs of delivering client work. The key is to treat reimbursables as part of your professional process: define the rules upfront, document what you spend, and present expenses clearly on your invoice.

When reimbursables are structured well, clients approve and pay faster, your cash flow stays stable, and you avoid awkward conversations about what should or shouldn’t be reimbursed. With a clean invoicing workflow—especially one that makes it easy to separate services from expenses and keep invoices organized—you can make reimbursable billing a non-issue and stay focused on doing great work.

If you want the simplest path: set expectations early, get approval for anything significant, and invoice reimbursables as clearly as you invoice your services. That combination is what turns reimbursables from a messy afterthought into a smooth, reliable part of your billing routine.