Add an expenses clause

Part 12: Define the expenses clause 

For freelancers, the expenses clause in a contract is essentially a way to state that you might need to spend some money to execute your job, and thus it’s reasonable for the client to pay expenses that directly support your work on the project. It's a way to make sure that you're not out of pocket for any costs incurred while working on a project. This clause ensures that you'll be reimbursed for those costs.

What kinds of expenses should you include in your contracts?

Travel

Any travel expenses you incur to execute the project. For instance, a freelance event photographer may contract with a fashion designer to shoot five runway shows in a month, three in Los Angeles and two in New York. They should make sure to include an expenses clause in their contract to guarantee their travel costs are covered. Some freelancers (especially those who travel for contract work) will also include a daily allowance (aka “per diem”) in their expenses clause to cover things like meals and accommodations. If you expect travel costs to be covered, but fail to specify your expected reimbursement under the expenses clause, you may be out of luck on recouping those costs.‍

Supplies

Necessary supplies you need for the project. For instance, a brand designer might need to buy licenses for certain preferred fonts in order to support the client’s desired typography.‍

Miscellaneous

Other miscellaneous expenses related to your work duties. For instance, a videographer might need to incur fees related to translation services for a documentary. If the freelance videographer did not specify that the client should cover any translation costs for a multilingual video project, then those expenses would likely be assumed to have been scoped into the freelancer’s payment terms.

As a general rule of thumb, if there's something you need to additionally pay for in order to do your job properly, it's probably worth including it in the expenses clause.

When will you get reimbursed?

In most cases, the freelancer is responsible for paying their expenses upfront and is reimbursed by the client after the completion of the project. However, some clients may choose to reimburse the freelancer on a monthly basis or at the end of each week.

It's important to define in the contract when your reimbursements will be due and how you'll submit your expenses for reimbursement. This is a term you should clarify upfront with the client so that you can reflect their internal approval processes in the contract.‍

No single element of a freelancing contract is more important to your bottom line than your payment terms. Always make sure they reflect what you aligned and landed on in your conversations with the client.‍

Now you’ve got all the key components of your contract

Now that we’ve gone over all of the key components of a contract, select one of the three examples projects to create a contract for. We recommend selecting the project that you do the most frequently or are speaking to a potential client about in the future. Add the information you outlined to your contract example template. You now have a filled-in contract you could send to a potential client!