Billing clients for resource expenses

I could use some other designers insights. I’m a freelancer and often I make purchases for my clients – stock photos, website plug ins, domain names, etc.

50% of the time I simply make these purchases through my own account and put a line item on the client’s next invoice for reimbursement. Usually I don’t mark it up unless it’s printing.

I’m rethinking the way I handle this because 1) At busy times the client expenses can be high and I’m “down” X amount of dollars because I pre-paid this expense for the client. 2) It’s more work for me entering expense invoices.

I wonder if I should just request Credit Card details for each client for these kinds of purchases. I don’t mind #2 so much above, but #1 can be a pain in the butt for large purchases.

Answer

In general, ask for a down payment to cover some parts of the expenses. You can charge these expenses at 100% of their value + the rest of the down payment you’d usually charge.

Don’t ask for credit cards numbers, that could give you more issues and not many clients are willing to share these info. Plus that also forces you to guarantee these info are kept in a secure manner.

Also, depending where you live… keep in mind that all the expenses you get paid for and get refunded still count partly as a revenue for you. Usually you also get a tax credit for the expenses but the revenue will still increase. Sometimes and for taxes reasons, you might want to stay below a certain bracket to not get in a higher one to save taxes. So whenever possible with big expenses and if your country has different levels of taxation, that can be another reason why it might be better to let the client pay directly for his/her own expenses.

For stock pictures:

I do as Ted Angel, and charge a flat amount. Don’t charge exactly what they cost you since as you said, there’s time you spend to manage this and there’s transaction fees too sometimes. If the client wants to save, they can freely open their own account at a stock picture site and send you the high resolution.

Use the comp or low resolution until the project is fully approved. Then send the full invoice before sending the final files that includes the high resolution. This way you never get stuck buying stock images and not being paid for them.

For plugins & hosting:

Let the client open his own account where you purchase the plugins. You can explain them that this way, they keep full control of the updates and it’s their property as well.

This way, you won’t have to deal with the renewals either and the client can share his account details with you or add you as an admin on this.

Prints:

Calculate a 20-30% margin added to the real costs of the prints, and order only once you got the payment sent to you.

In general:

Add an extra that will include the management required to deal with the expenses and the extra paperwork.

Attribution
Source : Link , Question Author : streetfire , Answer Author : go-junta

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