What Is a Disbursement Invoice?

Companies issue invoices to clients and customers for the goods and services they provide on trade credit. Companies occasionally incur additional costs related to servicing a client. These costs, including photocopies made or mileage used on behalf of a client, if left unpaid can become significant. Businesses must recoup these costs, as failure to do so could lead to loss of revenue and unexpected expenses. Businesses typically send their clients disbursement invoices to obtain payment for these miscellaneous expenses.

A disbursement is a payment or outflow of cash, typically via cash, money order or check. Federal, state and local government entities may also disburse via voucher. A disbursement also includes payment made by an agent or representative, such as an attorney handling a contract dispute on behalf of a client who then presents the bill to the client for reimbursement.

A disbursement invoice is what a vendor, agent or representative presents to a company showing monies already spent on the company's behalf. The invoice qualifies as proof of the funds expended and typically lists the items or services the vendor purchased and their associated costs. Disbursement invoices differ from regular invoices because they show the amount the vendor or other entity submitting the invoice spent and what they now expect as repayment.

Although the disbursement invoice’s primary purpose is to obtain reimbursement, the invoice may include a markup. For example, an attorney may charge $1 per page for each fax sent when the actual cost may have been 5 cents for the total fax. In this case, the disbursement invoice will only include the attorney’s fee for the fax, not what the attorney paid.

Disbursement invoices may include a broad range of fees, depending on the business or individual submitting the invoice. Fees can range from travel and meal costs incurred by a consultant on a project, to overnight shipping fees incurred by the company's banker to send documents. Charges for reimbursement include costs of subcontractors authorized by a firm, but paid for directly by the vendor. Other miscellaneous fees may include admission fees, parking fees and postage fees.

Common users of disbursement invoices include employees who submit invoices with receipts attached for travel and entertainment expense reimbursement. Users also include attorneys, accountants, architects and other professionals who use contracts that specify that all expenses incurred must be reimbursed. In addition, construction companies that use cost-plus contracts submit disbursement invoices showing the building materials and supplies purchased with the contractor’s mark-up included.