Guide · Expenses
Expense reports for freelancers
An expense report does two different jobs for a freelancer: it asks a client to reimburse a cost, and it keeps your own records straight. Mixing the two is how costs get lost.
Two different things called an expense
A business expense is something you pay for to run your business — software, a laptop, a co-working desk. A reimbursable expense is a cost you incurred on a specific client’s behalf and are passing through. The first belongs in your bookkeeping; the second belongs on an invoice or an expense report. Keep the categories separate, or you will either double-bill or miss a deduction.
What you can bill a client
Only what the contract or the client’s policy allows. Travel, mileage, parking, shipping, materials and subcontracted work are common pass-throughs. Meals are often capped or excluded. If you mark costs up, disclose the markup in the contract and apply it consistently; undisclosed markup is a fast way to lose trust.
Receipts: the $75 habit
Many businesses require receipts for anything over $75, and for all lodging and airfare regardless of amount. Photograph the receipt when you get it and put it in the same folder as the report. A report without support is the one that gets sent back — and a paper receipt fades faster than you think.
Categories that make the report readable
Travel, meals, materials, software and other is enough for most freelance work. If a client gives you cost codes or a chart of accounts, use their categories, not yours. The point of the report is to let someone approve it quickly, not to show how many labels you can invent.
Mileage
Log the date, the from and to addresses and the business miles. Use the current IRS standard mileage rate or your actual costs, whichever the policy allows, and do not switch methods mid-year without checking. A mileage log is separate from the receipt pile; keep both.
The report vs the invoice
If a client will reimburse you directly, an expense report with receipts is the cleaner document. If the cost is part of what you are billing, put it on the invoice as its own line — “Travel: Dallas, at cost” — and attach the receipts. Do not do both for the same cost.
A worked example
| Expense | Category | Amount |
|---|---|---|
| Flight AUS–SFO | Travel | $340.00 |
| Hotel, 2 nights | Travel | $420.00 |
| Team lunch with client | Meals | $86.40 |
| Taxi to site | Travel | $38.00 |
| Total to reimburse | $884.40 |
The expense report generator groups rows by category and adds the subtotals; the blank expense report template is the paper version. For how the costs then appear on a client invoice, see how to write an invoice.
Reimbursement and deductibility rules depend on your situation. This is general information, not tax advice — ask an accountant about your own return.
Related
How to bill hourly work
Rates, time tracking, rounding and a timesheet-to-invoice workflow.
Invoice record keeping
What to keep, how long, and how to survive an audit or dispute.
How to write an invoice
The seven parts of a US invoice, a worked example and common mistakes.