Travel, accommodation, meals, miscellaneous project-related purchases don’t make much noise. Taken individually, they seem trivial. But when accumulated and poorly tracked, they end up eating into your margins and creating tensions within teams.
A well-structured expense rebilling process is key to keeping accounts accurate, transparent, and protecting the profitability of your projects. Whether you’re in consulting, construction, IT, services, or industry, it’s not so simple to know how to rebill expenses correctly—without overcharging or undercharging.
Between rebilling, disbursements, VAT, and accounting rules, the road is often full of pitfalls. Let’s sort it out together.
What Does It Mean to Rebill an Expense?
In short, you paid something for a project—a train ticket, a hotel night, a specific purchase—and you want to be reimbursed by the client. That’s normal. But for it to go smoothly, the expense must be:
- justified;
- provided for in the terms of the contract or approved by the client;
- correctly mentioned on the invoice (with or without VAT, depending on the situation).
Choosing the Right Rebilling Model: And How Alibeez Can Simplify Your Life
Your rebilling model isn’t just a checkbox. It directly impacts your profitability, client trust… and the time your teams spend double-checking everything. Rebilling at cost, with a margin, or with a flat rate: each option has its pros and cons. And to avoid mistakes, nothing beats configuring and automating these models directly in your management tool.
1. Rebilling at Cost (1:1)
Principle: Exact rebilling of the incurred cost (no added margin).
Typical use: When expenses must be fully recovered, often between subsidiaries or for internal projects.
Advantages: Maximum transparency, accounting simplicity.
Disadvantages: No profit or coverage of management costs.
💡 What if you could track every expense, project by project, with no risk of forgetting or making mistakes? That’s exactly what Alibeez allows you to do.
2. Rebilling with a Flat Margin
Principle: Rebilling actual expenses + a predefined margin (percentage or fixed amount).
Typical use: Internal admin services, external project management, covering admin or overhead costs.
Advantages: Covers indirect costs linked to managing expenses.
Disadvantages: Can be perceived negatively if not well explained to clients (internal or external).
💡 With Alibeez, you can apply your margin automatically, without having to recalculate or recheck each invoice. Simple and transparent.
3. Global Package (Flat Fee)
Principle: A fixed amount determined in advance to cover all expenses incurred.
Typical use: Turnkey projects, fixed-budget services.
Advantages: Simplicity, predictability, strong commercial advantage.
Disadvantages: Financial risk if actual expenses exceed the set fee.
💡 Alibeez helps you track expenses in real time, so you know whether you’re staying on track or exceeding the package.
What’s the Difference Between Rebilling and Disbursements?
Disbursements: you pay directly on behalf of the client. You advance the money, but the expense is not a cost for your company. And most importantly, no VAT applies.
Rebilling: different story. You incur the expense yourself, in your company’s name, and then rebill it to the client, including VAT if it applied to the original expense.
Example: You pay €200 to a supplier in the client’s name → disbursement, no VAT. You pay a hotel in your company’s name → rebilling with VAT.
Not always easy to distinguish, but it’s essential! Otherwise, you risk accounting or tax errors.
Rebilling Expenses and VAT: Which Rate Applies?
Often forgotten, VAT doesn’t apply the same way depending on the type of expense rebilled. A quick reminder to avoid unpleasant surprises:
- Transport, accommodation: 10% VAT
- Restaurants: 10% VAT
- Services: 20% VAT
- Disbursements: no VAT
Check VAT in advance and make sure you’ve recovered it before rebilling to the client. A mistake here can be costly or trigger a tax audit.
Example: if you rebill a service invoiced €500 excluding VAT by your supplier, apply 20% VAT. Result: €600 including VAT on the client’s invoice.
3 Practical Tips to Manage Expense Rebilling Effectively
Poorly rebilled expenses = lost margins and shaky accounts. Here are 3 key levers:
1. Establish a Clear Rebilling Policy
Define what can be rebilled, what cannot, with or without caps, with or without margin… Put it all in writing. No grey areas.
Sharing these rules with your teams and clients ensures consistency and clarity across all projects. Also include specific rules for reimbursement and accounting of business expenses.
2. Use Expense Management Tools
A good tool prevents errors and centralizes info. With software like Alibeez, you can:
- allow or disallow consultants to enter expenses by project;
- define what is billable or not;
- set up automated checks;
- centralize information so billing is based on reliable data.
These tools also help with expense accounting, deductible VAT control, tracking reimbursements, and ensuring reliable data for the accounting department.
3. Foster Effective Communication with Clients
Don’t neglect consultant–client communication. It’s one of the pillars of smooth operations. A well-informed client pays faster and disputes less. For example, avoid billing vague “miscellaneous expenses.” Be specific: what, when, why, with or without VAT, and attach supporting documents.
This clarity improves understanding, eases expense validation, strengthens client relationships, and secures invoicing.
Why Poorly Managed Rebilling Can Cost You Dear
Let’s be clear: if you forget to rebill an expense, apply VAT incorrectly, or send a vague invoice… you lose money. Small amounts add up and can eat into margins.
Beyond the financial side, you also risk:
- disputes with the client;
- complications for your accounting department;
- wasting time explaining or correcting.
Poorly managed rebilling weakens both your company’s cash flow and its relationships with partners. That’s why it’s crucial to set up solid tools and methods to track, control, and account for every expense rigorously.
Managing Rebilling Between Subsidiaries or Group Companies
No problem, as long as you:
- clearly identify each entity;
- respect intra-group invoicing rules;
- properly record flows and amounts between companies (intercompany accounts);
- apply the correct VAT, especially if in different countries.
As you can see: shaky expense rebilling undermines both cash flow and client relationships. Solid tools and processes are essential to track, control, and account for every expense. Mastering expense rebilling is a key lever to secure your revenue!
FAQ
What expenses can be rebilled?
Anything related to a client mission: transport, accommodation, meals, specific purchases. These must be included in the contract, validated by the client, and backed by proper documentation.
Disbursements vs rebilling: what’s the difference?
- Disbursement: you pay on the client’s behalf (no VAT).
- Rebilling: you incur an expense in your name and then rebill it (with VAT).
Example: advance to a supplier paid in the client’s name = disbursement; hotel invoice in your company’s name = rebilling.
Is a receipt always required to rebill an expense?
Yes. Without a receipt (invoice or expense note), you risk client rejection or issues in case of a tax audit.
Can you add a margin on rebilled expenses?
Yes, but only if stated in the contract. Otherwise, expenses must be billed at cost, with no markup.
What if an expense was not rebilled?
You can issue a corrective invoice or include it in the next invoice, provided the client agrees and legal deadlines are respected.
What are the risks of poorly managed rebilling?
Client disputes, financial loss, accounting irregularities, VAT errors, penalties in case of tax audits.
Should VAT always be indicated on rebilling invoices?
No. It depends on the type of expense. Disbursements are VAT-exempt, but other expenses (transport, accommodation, meals, services) require the correct VAT rate.
What’s the accountant’s role in expense rebilling?
The accountant verifies amounts, receipt compliance, correct VAT application, and proper bookkeeping. They help avoid mistakes and disputes.
Is it mandatory to use software for managing rebilling?
Not legally, but strongly recommended to secure the process, automate controls, and centralize information.
Can I rebill expenses without VAT if I’m VAT-exempt?
Yes, but be careful: VAT exemption must apply to the rebilled expenses as well, not just your main services. Check case by case with your accountant or tax advisor.