Passthrough billing
Your client pays for hosting. It should never touch your invoice.
Every other tool in this category makes you run your client’s hosting, domains, and API bills through your own invoicing. Your revenue comes out inflated, your margin comes out wrong, and you explain it to an accountant once a year. There is a better way to model it.
The problem
Their AWS bill is not your revenue
If you build sites or run systems for clients, some of the money moving through your month was never yours. Hosting, domains, SSL certificates, and increasingly API and AI usage are the client's cost, not yours.
- Most tools give you one option: put it on your invoice. Now your revenue is inflated by money you are only passing along.
- Your margin looks wrong, because the denominator grew and your actual work did not.
- At tax time you are explaining why a chunk of your income was never income, to an accountant who bills by the hour.
- The common workaround is to keep it off the books entirely, which is accurate but loses the record. Then the client asks what their monthly cost is and you are reconstructing it from memory.
How it works
Disclosed on the quote, never billed
Passthrough is a property of a recurring quote line, not a category you tag afterwards. You set it when you build the quote and the system treats that money differently from then on.
- Mark the recurring line as passthrough. Hosting, domains, SSL, API or AI usage, or a subscription the client will own.
- The quote shows it to the client as an estimate, so they know what they are committing to and who they will owe it to.
- No invoice is ever raised for it. No payment is ever collected for it. There is nothing to reconcile later.
- It stays visible in the client's portal as part of what the arrangement costs them, which is the question they actually ask.
What it fixes
Numbers that match what you actually sold
The point of keeping this money out of your billing is that everything downstream gets more accurate without you doing anything.
- Profit per job counts the work, not the infrastructure the client bought.
- Your profit and loss reflects your business rather than your clients' vendor spend.
- Tax-ready exports do not need a manual subtraction pass before you hand them over.
- The client still sees the full picture of what their month costs, in one place, on one document.
Being precise
What passthrough is not
The word gets used loosely in this category, so it is worth drawing the line clearly.
- It is not an expense category. An expense is money you spent. This is money you never touched.
- It is not a reimbursement. Nothing is fronted by you and paid back later.
- It is not a markup or a resale. If you want margin on hosting, bill it as a normal line, which the product also supports. The two are kept separate on purpose.
- It is not a way to hide revenue. The cost is disclosed to the client on the quote before they accept.
A worked example
The same month, billed two ways
You run a care plan for a client at $3,000 a month. They also pay $180 a month for hosting, $18 for a domain renewal, and around $1,200 for the AI API their app calls. All of it goes to those providers on their own card.
- Run through your invoicing: the year reads as $52,578 of revenue. Your effective margin looks thin, your quarterly estimates are calculated off a number that is not yours, and every one of those provider charges needs reconciling against a payment you collected and passed on.
- As passthrough: the year reads as $36,000, which is what you sold. The client still sees the full monthly cost on their quote and in their portal. Nothing needs reconciling, because nothing moved through you.
Same work, same client, same money changing hands. One of these numbers is the one you should be making decisions from.
Try it
Quote your next retainer with the real numbers
Passthrough is included on every plan, along with the branded client portal, six quote billing modes, and retainers with an allowance of included hours. $15 a month, unlimited internal users, 30 days free.