A year of site visits, and the client paid for none of them
An engineer drives to site every fortnight for inspections on a project where the appointment says mileage and parking are recharged at cost. They claim the mileage through the practice's expense process each month, get reimbursed, and nobody tells accounts which project it belonged to. The invoices to the client never include it.
The same happens with printed drawing sets, courier costs for samples, and train fares to client meetings on jobs where travel is recoverable. Each item is small. Across all projects and a year, it adds up to money the practice has agreed to recover and never asked for.
Why disbursements slip
- Expense claims record the cost, not always the project.
- Appointment terms about recoverable expenses vary by client and are not visible when claiming.
- Expenses are processed by accounts after the project invoice has been raised.
- Mileage is claimed monthly as one line, not per trip.
- Nobody reviews unrecovered expenses by project.
Appointment terms vary more than people expect. One client pays mileage at a set rate, another only for visits beyond a certain distance, a third includes all travel in the fee. The engineer claiming the expense has no reason to know which applies, and accounts has no easy way to look it up.
What the leak costs
| Gap | Consequence |
|---|---|
| Expense not tagged to project | Cannot be recharged |
| Recoverable terms not known | Costs absorbed on jobs where they are chargeable |
| Recharged late | Client queries old costs, harder to collect |
| Travel hidden in overheads | Project profitability looks better than it is |
It also distorts pricing. When travel is absorbed into overheads, projects a long way from the office look as profitable as local ones. Directors then quote distant work on the same basis, and the practice keeps winning jobs that quietly cost more to run than anyone realised.
How we connect expenses to invoices
- Expense claims, whether through Xero Expenses, Expensify, Dext or a simple form, require a project for each item, with the engineer's recent projects listed first.
- Mileage is recorded per trip, with start and destination, so the site visit is visible.
- Each project's appointment terms for expenses are recorded once: recoverable or not, at cost or with uplift, which categories.
- Recoverable expenses are collected against each project automatically.
- When the next client invoice is drafted, recoverable items are added with supporting detail for the director to approve.
- A report shows expenses per project, recovered and unrecovered, so project costs are complete.
Whether an expense is recoverable is set by your appointment. We simply make sure the terms are applied every time.
We usually load expense terms for live appointments from your fee schedules first, then look back over recent expense claims to identify any recoverable items that were missed. Whether to recharge those retrospectively is your decision, but it gives a clear picture of the gap.
After the link
Engineers claim as before, with one extra field. Accounts no longer have to guess which trip belonged to which job. Recoverable costs appear on invoices without anyone remembering to add them.
Directors see the true cost of each project, including travel, which helps when pricing future work at a distance.
Is this leaking in your practice?
- Expense claims do not always record a project.
- Mileage is claimed as a monthly total.
- Recoverable expenses are rarely on client invoices.
- Appointment terms about expenses are not known to accounts.
- You do not know travel costs per project.