What Is the Difference Between Billable and Reimbursable Expenses?
Learn the key differences between billable and reimbursable expenses in business and how they affect client billing and company reimbursements.
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Billable expenses are costs incurred by a business on behalf of a client and then charged to that client. These expenses are directly related to generating income for the business. On the other hand, reimbursable expenses are costs that employees or contractors have paid out-of-pocket or with personal funds, which the company then reimburses. While both involve repayment, billable expenses are tied to client projects, whereas reimbursable expenses relate to internal company operations or employee costs.
FAQs & Answers
- What are billable expenses in business? Billable expenses are costs a business pays on behalf of a client, which are then charged to that client as part of a project or service.
- How do reimbursable expenses work for employees? Reimbursable expenses are out-of-pocket costs employees incur while conducting company business, which the company later reimburses.
- Can billable expenses also be reimbursable? No, billable expenses are charged to clients, whereas reimbursable expenses relate to employee or internal company costs that are reimbursed by the business.