Add each cost to the client's recurring invoice on the day you start paying for it, and make sure your contract lets you pass it on. Recharges usually slip because the cost renews on the agency card every month while the client's invoice stays the same. If that recurring invoice is collected by direct debit, the recharge goes out with the retainer and nobody has to remember it.
In this article
The short version
- Recharges slip because the cost renews on the agency card while the client's invoice stays the same.
- A £45 monthly hosting cost missed for a year is £540 per client.
- Put pass-through costs, margins, price rises and exit arrangements in the contract.
- Hosting bought in your own name and billed on is usually part of your supply for VAT; check true disbursements with your accountant.
- Add each cost to the recurring invoice the day you buy it and collect the invoice by direct debit.
Why hosting and software costs go unbilled
You launch a client's new site and move it onto your hosting plan at £45 a month. The project invoice goes out, the site's live, and the team moves on to the next job. The hosting renews on the agency card every month from then on, and unless someone added a line to that client's retainer, it's just a cost.
The same thing happens with domains that renew once a year, plugin and theme licences, a seat on a scheduling or SEO tool bought for one client, and supplier price rises that never got passed on. Each one is small, so none of them feels urgent on its own.
They add up, though. A £45 hosting recharge missed for a year is £540, and six clients on the same plan make £3,240 a year paid out of your margin. Often nobody notices until a client leaves and you realise you've been paying for their site since launch.
What to put in your contract
A recharge is much easier to add, and to increase, if the client agreed to it at the start. A short clause in your terms or statement of work should cover:
- Which costs you'll pass on (hosting, domains, licences, third-party tools bought for their account) and whether you add a margin for managing them.
- That they're billed monthly on the retainer invoice, or yearly for annual renewals.
- That supplier price rises are passed on with notice.
- What happens when the contract ends: whether you transfer the hosting and domain to them, and by when.
On VAT, hosting or a licence you buy in your own name to supply your service is usually part of that supply, so you charge VAT on the recharge; only a true disbursement, paid as the client's agent and passed on at exact cost, sits outside it. Check anything bought in the client's name with your accountant.
Some clients would rather own the hosting and pay the supplier directly, which leaves nothing for you to recharge.
How to get recharges onto the invoice
Tie the invoice line to the moment you buy something, then check monthly.
- Keep a recharge list: client, cost, supplier, monthly or yearly, and the date it renews. A tab in your client tracker is enough.
- Make adding the invoice line part of buying the thing. Whoever puts a new cost on the agency card adds it to the list and to the client's recurring invoice the same day.
- Bill annual costs on a yearly recurring invoice set to go out before the renewal date, or spread them across the monthly invoice if the client prefers.
- Once a month, compare the card statement with the recharge list. Anything on the card that isn't on the list is either a new recharge or a cost to cancel.
How to collect recharges without chasing
A recharge on the invoice still has to be paid, and a £45 line is easy for a client to leave until later. Collecting the whole recurring invoice by direct debit avoids that. One mandate covers amounts that change from month to month, as long as the client gets notice of each amount and date, so adding hosting to the retainer doesn't mean a new signature.
Adfin's recurring invoices go out automatically on the schedule you choose, and you can set up hosting and licences in advance so adding one to a client's invoice takes a moment. Recurring invoices sync to Xero or QuickBooks. Direct debit takes the amount and due date from each invoice, and the client is notified before each collection.
For clients who pay by link instead, Customer Agents in Adfin can remind them by email, SMS or WhatsApp until the invoice is paid.
Common questions
Should I add a margin to hosting and software I recharge? That's your choice, and some agencies do to cover the time spent managing it. Whatever you decide, put it in the contract so the client knows what they're paying for.
Do I charge VAT on hosting I recharge to a client? Usually yes, if you bought it in your own name as part of your service. Only a true disbursement, paid as the client's agent and passed on at exact cost, sits outside your VAT.
Can I change a recurring invoice once it's set up? Yes. Changes apply to invoices that haven't gone out yet, so add the new line before the next one is sent.
How do I bill a yearly domain renewal? Put it on a yearly recurring invoice timed to go out before the renewal date, or spread it across the monthly retainer if you've agreed that with the client.
Does the direct debit change when I add a recharge to a client's invoice? The amount does, but the mandate doesn't. One mandate covers varying amounts, provided the client is notified of each amount and date before it's collected.
What if a client stops paying for hosting I'm still paying for? Your contract should say what happens, for example that you'll transfer or close the hosting after a notice period. Without that clause, it's worth adding one before the next renewal comes round.
Sources
- GOV.UK - VAT: costs or disbursements passed to customers (accurate as of October 2026) https://www.gov.uk/guidance/vat-costs-or-disbursements-passed-to-customers
- Adfin Help Centre - Set up and edit a recurring invoice (accurate as of October 2026) https://support.adfin.com/en/articles/15420021-set-up-and-edit-a-recurring-invoice
- Adfin Help Centre - Getting started with direct debits (accurate as of October 2026) https://support.adfin.com/en/articles/10192945-getting-started-with-direct-debits
