Reimbursables have a prior agreement: Why it matters for businesses and clients
When working on a project with a client, businesses often incur expenses that are not included in the original agreement. These expenses, known as reimbursables, can range from transportation costs to materials and supplies. However, it is important for both parties to have a clear understanding and agreement on what constitutes a reimbursable expense and how it will be handled before the project begins.
Why is this important? Without a prior agreement on reimbursables, businesses may end up paying for expenses that they did not anticipate, impacting profitability and potentially causing tension with the client. On the other hand, clients may feel as though they are being overcharged or taken advantage of if they are not aware of what expenses will be incurred.
To avoid these issues, it is important for businesses to have a clear policy on reimbursables and to communicate it with clients before the project begins. This policy should outline what expenses are considered reimbursable, such as travel expenses, materials, and equipment needed specifically for the project. It should also detail the process for submitting reimbursable expenses, including what documentation is required, how quickly expenses will be reimbursed, and how they will be tracked.
In addition, it is important for businesses to communicate with clients throughout the project to ensure that they are aware of any additional expenses that may be incurred. This can be done through regular progress updates and by providing detailed invoices that outline all charges, including reimbursables.
Having a clear agreement on reimbursables not only helps to avoid misunderstandings and conflicts, but it also helps to build trust and transparency between businesses and clients. By being upfront about expenses from the beginning, businesses can demonstrate their commitment to providing quality services and avoid any surprises that may impact the client relationship.
In summary, reimbursables have a prior agreement is a crucial aspect of any business-client relationship. By having a clear policy in place and communicating regularly with clients, businesses can ensure that both parties are aware of what expenses will be incurred and how they will be handled. Doing so helps to build trust and transparency, ultimately leading to a stronger and more successful partnership.