# 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 Item | Amount |
|---|---|
| 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 Item | Amount |
|---|---|
| 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 Item | Amount |
|---|---|
| Agent work: 6h @ £75/hr | £450 |
| LLM tokens: 180k @ £0.003/k + 20% | £0.65 |
| **Total** | **£450.65** |

## Choosing a Pattern

| Factor | Pass-Through | Bundled | Cost-Plus |
|---|---|---|---|
| Client transparency | High | Low | Medium |
| Billing simplicity | Medium | High | Medium |
| Margin predictability | High | Medium | High |
| Best for | Hourly clients | Fixed-price | Agencies |