Out-of-pocket expenses clause

A contract provision specifying which third-party costs (software licenses, stock assets, ad spend, travel) are billable to the client separately from the agency's own fees, and how they're reimbursed.

Example

A contract's expenses clause states that any stock photography or premium plugin licenses purchased for the project are billed to the client at cost, with receipts, separate from the agency's design fee.

Why it matters for agencies

Without this clause, third-party costs incurred mid-project — often triggered by a client's own request for something premium — become another quiet drain on margin, similar to unbilled labor from scope creep but showing up as an out-of-pocket loss instead.