Expense Markup, Reimbursable, and Taxable Settings

Applies to: Premium · LawBillity

Three settings on each expense decide what happens to it: the markup (what the client pays), Reimbursable (whether you pay someone back), and Taxable (whether tax is added on the invoice). Set them when you enter or edit the expense.

Which Setting Do I Need?

If...

Do this

You bill the client exactly what it cost

Leave Markup Ratio at 0%.

You add a handling fee or surcharge

Enter a Markup Ratio, such as 15 for 15%.

An employee paid out of pocket and should be paid back

Set Reimbursable to Yes.

The firm paid, for example on a company card

Leave Reimbursable at No. You can still bill the client.

Tax should be added on the invoice

Set Taxable to Yes.

How Markup Works

The markup adds a percentage to the cost on the invoice. A $100 expense with a 15% markup is billed to the client as $115. Markups of 10% to 25% are common, depending on your industry and the type of expense.

Reimbursable and Billable at the Same Time

One expense can be both. Say an employee pays $50 for parking. You mark it reimbursable and add a 20% markup. The employee gets $50 back, the client pays $60 on the invoice, and the $10 difference is revenue.

At the end of each pay period, run the Expense report to see what you owe people. See Expense Reports.

Taxable

Set Taxable to Yes if tax should be charged on this expense. The tax rate comes from your firm's settings, not from the expense.

Common Problems

The invoice shows more than the receipt. The expense has a markup. Set it to 0% if it should be billed at cost. If the invoice is already finalized, see Creating Billing Adjustments.
No tax was added to an expense. Check that Taxable is set to Yes on that expense.
You need to change several expenses. Expenses that are already on a finalized invoice are locked. See Understanding Billing Statuses: UnBilled, Pre-Billed, and Billed.