Cost Allocation Patterns

How to allocate agent and LLM costs across projects and clients.

Pattern 1: Pass-Through

LLM costs are invoiced directly to clients at cost. The margin comes from the agent’s billable rate.

Best for: Clients who want full transparency.

Setup

  1. Set the agent billable rate to your desired margin.
  2. Include LLM expenses on invoices as a separate line item.

Example

Line ItemAmount
Agent work: 6h @ £75/hr£450
LLM tokens: 180k @ £0.003/k£0.54
Total£450.54

Pattern 2: Bundled Rate

Agent rate includes an estimated LLM cost. LLM expenses are tracked internally but not shown on invoices.

Best for: Fixed-price engagements or clients who prefer simplicity.

Setup

  1. Estimate average LLM cost per agent hour.
  2. Add it to the agent’s billable rate.
  3. Exclude LLM expenses from invoices (mark as non-billable).

Example

Line ItemAmount
Agent work: 6h @ £80/hr (includes LLM)£480
Total£480

Pattern 3: Cost-Plus

LLM costs are invoiced at cost plus a margin (e.g., cost × 1.2).

Best for: Agencies managing multiple models with varying costs.

Setup

  1. Track LLM costs as expenses.
  2. Apply a markup in the invoice (manually adjust the expense amount).

Example

Line ItemAmount
Agent work: 6h @ £75/hr£450
LLM tokens: 180k @ £0.003/k + 20%£0.65
Total£450.65

Choosing a Pattern

FactorPass-ThroughBundledCost-Plus
Client transparencyHighLowMedium
Billing simplicityMediumHighMedium
Margin predictabilityHighMediumHigh
Best forHourly clientsFixed-priceAgencies