10 Business Expenses That Should Be Taken Care Of By Your Customers

A small business needs its cash flow to be positive at all times but it’s almost inevitable to come across situations when sales get too low and/or receivables start piling up. The first intuitive idea that might come to your mind in such a scenario will be to cut down on the operational expenses or marketing budgets or training spending; but before you begin decreasing your chances of landing new business or adding to your employees’ skillsets, stop to think whether you can relay the expenses onto your customers. This might sound a bit selfish but if you believe that you are selling a worthy product/service, then there is no need to sell it short; after all it’s a consequence of your hard work and your growth is dependent on your revenue. Aforementioned is why you should never use an invoicing template without refining it according to your needs because well, no two companies are similar. With that said, let’s take a look at some of the expenses that a small business can relay to its customers:

1. Supplies Used for Consumer Projects

If your customer asks you to build a project that requires supplies that will not be used again, then it’s vital that you charge them for it. For example, if you are a T-shirt printing company that deals with cotton but a customer wants you to use polyester for their order, then regardless of the amount of polyester that went into their t-shirts, the invoice should include the cost of all the polyester you bought. Similarly, if the ad-hoc project included any other supplementary costs like printing or pre-processing of raw material then that also needs to be reflected in the bookkeeping and in the invoice.

2. Consultation Fees

It will not be a bad practice to add “consultation fees” as a default parameter within your invoice generator because most of the time, before you start any new project, you spend a lot of time with the potential customer laying down the groundwork and generating a financial estimate. Instead of giving useless advice for free, it’s better to offer valuable consultation for a fixed fee.

3. Research Fees

It’s a widespread misconception that the time you spend thinking about a project is not to be included in the invoice maker. Brainstorming or research is an important part of every project and hence, when you create an invoice for your customer, it should be included. The best way to bill research is to use a time tracking application to log the actual time you spend scavenging resources for your customer. This is a good documentation practice and it also helps you track the amount of time you are spending on different customers.

4. Travel Costs

If you have to travel to meet the expectations of a customer, then you need to indicate that in the bill you send their way. Good applications come with free invoice templates that already contain the travel costs’ field but it is still often left empty by small businesses.

5. Mailing Costs

If you are shipping a product to a customer, then you should definitely add the costs for packaging, mailers, postage and shipping to the generated invoice. If you don’t know how you can add the cost to your invoice, you can see how a sample invoice is created. It’s also prudent to charge depending on the weight of the product and not its cost.

6. Credit Card Payments

It’s always appreciated by customers if you have as many payment methods as possible but, accepting online payments, especially via credit cards is a must. Not only do you get paid in a faster, in a more efficient way, but it also makes life a lot more convenient for your customers. The catch, however, is that you will have to pay fees for every credit card payment you receive. It’s debatable whether you should relay all of the extra cost to your customers or share half of it with them but it’s pragmatic to not pay all of it.

7. Related/Miscellaneous Expenses

Miscellaneous expenses are often frowned upon by customers but since you are running a business (and not a charity), you need to include them in your invoices. For example, if you have to go to another country to deliver a package by hand for a customer then you should not only include the travel cost in the final bill, but you should also charge them for the meals you ate and any other expenses that you incurred during the trip. This privilege, however, can easily be abused so it’s expected that some customers might call you to inquire the legitimacy of the mentioned expenditures and it’s important that you are able to show them all the pertinent receipts.

8. Tracking and Insurance

“Hope for the best but expect the worst” is a cliché but it’s also as true as it gets; especially when we talk about transit risks. For example, a product might not be able to reach its destination in the advertised condition because of bad weathers or road conditions or poor handling etc. This is where insurance comes into the picture and helps you stay protected. Customers like to be insured and prefer companies that offer product tracking. Therefore, in order to ensure that you get minimum product-returns and maximum customer satisfaction, you should get insurance and tracking and charge your customers adequately for it.

Final Word

When it comes to creating invoices, many small businesses make the mistake of not including some of the costs they incurred during the delivery of a product/service. If your business is still in the initial stages of growth, then you need to ensure that you bill down to the last penny, because, well, your livelihood is dependent on it. In this article, some of the business expenses that can be relayed onto customers, were shared, and they can help a business a great deal in its bid to sustain and grow.

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