Invoicing Disbursements

Article Contents

1. Introduction
2. When Disbursements Appear on an Invoice
3. Processing an Individual Disbursement Line
4. Disbursements Added After the Invoice

Introduction

In the Managing Disbursements article we covered how to create disbursement work types, how staff record them on projects, and how to make them visible in the work schedule. This article takes the next step. It explains what happens when you raise an invoice for a project that already has disbursements recorded, how to present those costs to the client, and what to do if the disbursement was added after the invoice was created.

This article works alongside the Reallocate or Write Off WIP Costs from Invoice Lines article, which already explains what happens to WIP when you move or write off a cost. Here we are focusing on disbursements specifically.

When Disbursements Appear on an Invoice

When you open an invoice, Hiro looks for disbursement timesheets on that project that are still in WIP. For each of those WIP disbursements it adds an invoice row so you can decide what to do with it.

There are four rules.

Rule 1. One disbursement entry = one invoice row

If there are three separate disbursement timesheets in WIP, Hiro will add three separate invoice rows. Disbursements are kept separate because they are often different amounts, suppliers or tax treatments. This is different to time from a project Work Schedule or Enquiries and Tenders, where multiple timesheets are grouped into one invoice line.

Rule 2. Revenue Date controls which rows start turned on

On a new invoice:

• If the disbursement is dated on or before the invoice Revenue Date, Hiro adds the row and it is turned on.

• If the disbursement is dated after the Revenue Date, Hiro still adds the row, but it is turned off. You can turn it on with the toggle on the left if you want to include it in this invoice.

This lets you bill a period cleanly, while still seeing newer disbursement WIP.

Rule 3. Reopening an unpaid invoice shows new WIP, but keeps your totals

If you reopen an invoice that is still unpaid, Hiro loads it exactly as you saved it. Then it checks the project for any new disbursement WIP that has been entered since you first raised that invoice. If it finds some, it adds those as extra rows with the toggles off so you can choose to process them now without changing the figures you previously set.

Rule 4. Paid invoices will not pick up new disbursements

If the invoice has been marked as paid and is in read only state, Hiro will not offer any new disbursement WIP on that invoice. This is to keep the issued invoice consistent with what the client received and what was sent to Xero.

If you need to process a disbursement that was entered after the invoice was paid, you have two clean options:

1. temporarily unallocate the payment so the invoice becomes editable again, process the disbursement on that invoice, then reapply the payment, or

2. create a new invoice for the disbursement, which can be a $0 invoice if you are just clearing the WIP.

Both of these paths clear the disbursement properly without altering a locked invoice.

Processing an Individual Disbursement Line

Once the disbursement rows are on the invoice, you choose how each one will be handled. Hiro gives you four ways to process a disbursement. Only using one of these four will remove the disbursement timesheet from project WIP.

If you simply turn the line off with the toggle, you have not processed it. It will come back on the next invoice for that project. Only turn it off if you are deliberately holding it to a later billing period.

Here are the four processing options available in the Type dropdown:

1. % markup (default)

This is the default for disbursements. You will see:

• the amount that was recorded on the timesheet in the Time & Costs column

• a dropdown set to % markup

• a blank markup box

• the tax dropdown

If the markup box is blank, that means 0% markup. In other words, invoice the disbursement at cost. So even though it says “% markup,” leaving it blank will just charge the exact amount that was recorded.

If you want to add a margin, type the percentage. Hiro will calculate the invoiced amount from the original cost.

Processing the line in this way clears the disbursement from WIP.

2. $ (charge the exact amount)

Choose this if you want to pass through the cost exactly as recorded, without showing or thinking about a percentage.

• Select $ in the dropdown.

• Enter the exact dollar amount you wish to charge for the disbursement.

This also clears the disbursement from WIP.

3. Reallocate to another invoice line item

Use this when the disbursement belongs to a particular piece of scope, but you do not want to itemise it on the client invoice.

Example. You have a subtask in the work schedule called “Town Planning Report.” To complete that report you engaged an external traffic consultant and recorded their invoice in Hiro as a disbursement. You do not want the client to see a separate line called “External traffic advice,” because from the client’s perspective it was part of delivering the Town Planning Report. In this case you reallocate the disbursement to the Town Planning Report invoice line.

How to do it:

1. On the disbursement row, choose Reallocate to another invoice line item…

2. The Amount and Tax dropdowns are replaced with an invoice line picker. Choose the invoice line that represents the scope item, for example “Town Planning Report.”

3. Hiro moves the cost amount of the disbursement row into the Time & Costs of that scope line.

4. The disbursement timesheet is cleared from WIP.

The client now sees one tidy line for the report, but your WIP is still accurate and shows that the external consultant cost was processed. This option is the best fit whenever you are bundling third party costs into a fixed fee or milestone, rather than showing them as pass throughs.

4. Write off

Write off is for the situations where you need the disbursement cleared from WIP, but it does not belong against any scope item and you are not going to bill it.

Typical cases:

• The supplier sent a small admin fee that you do not want to pass on.

• You chose to absorb the cost as goodwill.

• The cost relates to internal training or investigation for the job, not to the client’s deliverables.

When you pick Write off:

1. Hiro removes the disbursement from project WIP.

2. The cost still counts towards the overall Time & Cost expense on the project for profit reporting.

3. It will not appear on future invoices.

4. The invoice stays clean because no extra line is added.

Disbursements Added After the Invoice

Sometimes a disbursement gets entered after the invoice has already been created. That cost is valid and should stay on the project, but it will not slot itself into a paid, read only invoice. Clear it using one of these approaches.

1. Invoice is still unpaid.

   Reopen the invoice. Hiro will have added the new disbursement at the bottom with the toggle off. Turn it on and process it using one of the four methods in the previous section, then save.

2. Invoice has been paid and is read only.

   You can temporarily unallocate the payment so the invoice becomes editable, process the new disbursement, then reapply the payment. This keeps everything on the one invoice.

3. Bill it on a separate invoice, including $0 invoices.

   Create a new invoice for the project and process the disbursement there. If you are not charging the client for it, set the invoice amount to $0 and choose Write off or Reallocate so the WIP is cleared. This is a clean way to tidy the job without changing the original paid invoice.