What is a billable expense and how is it billed?

• A. An expense recorded as billable can be charged to a customer by creating an invoice or adding to an invoice with Billable selected.
• B. A payment made to vendor recorded as expense.
• C. A purchase order.
• D. A credit from supplier.

Answer: (A)

A billable expense is an expense you incur on behalf of a customer that you intend to charge back to that customer. When you record the expense, you mark it as billable and assign it to the specific customer or job. Later, while creating or updating the customer's invoice, you can add those billable expenses to the invoice so the customer is billed for the actual costs you paid.

For example, if you buy supplies for a client’s project, you can record that purchase as a billable expense and link it to that client. When you generate the invoice for the client, you’ll be able to include that expense on the invoice, so the client pays you back for the cost.

Other options don’t fit because they’re not charges billed to a customer. A payment to a vendor recorded as an expense is just an expense item for your own records. A purchase order is a request to purchase goods, not an expense you bill the client. A supplier credit is a credit from the vendor, not an expense you bill to a customer.