Time tracking and billing for private investigators

Most PIs didn’t get into investigation to do bookkeeping, and it shows. Hours get reconstructed from memory at the end of the month. Mileage gets estimated. Database fees get forgotten. Invoices go out late, with a single line that says “Investigative services — 23.5 hours,” and then the client asks what they’re paying for.

Accurate time and expense records aren’t only about getting paid. For hourly work, your invoice is a second account of the investigation, and it should agree with your report and your log. When it doesn’t, clients notice, and so can opposing counsel if billing records ever come up in a dispute.

This guide covers the habits that make billing straightforward: capturing time as you go, handling mileage and expenses, writing invoices clients don’t question, and getting paid.

Capture time as you work, not afterwards

Reconstructed time is both less accurate and less defensible. A timer started when you begin a task and stopped when you finish takes seconds and removes guesswork.

Pursuit Magazine’s piece on running a PI business describes one investigator’s routine: a weekly “paperwork day” for invoices, license renewals and admin, and a time-tracking app used for hours on each case plus mileage logging and receipt photos. The tool matters less than the habit: record time against a specific case, at the time, with a note of what you did.

Good time entries have:

• The case. Every entry belongs to one case.
• The activity type. Surveillance, research, interview, travel, report writing, court. Different activities may carry different rates, and clients want to see the mix.
• Start and end times, or a duration.
• A short description. “Database searches: subject addresses and vehicles,” not “research.”

For surveillance, your surveillance log already records arrival, departure and breaks. Make sure your billed hours match it.

Mileage and expenses

Mileage. Record odometer readings at the start and end of each case-related trip, or use a mileage app, and tie each trip to a case. Agree your per-mile rate with the client in writing. Many PIs bill at or near the IRS standard mileage rate, which changes and is published on the IRS website. Whatever you charge clients, keep proper mileage records for your own tax purposes too; talk to your accountant about what the IRS requires.

Expenses. Photograph receipts as you go and attach them to the case: parking, tolls, database and records fees, court copy fees, lodging, meals if your agreement allows them. Decide and state whether you mark up expenses. Clients are less bothered by a markup they were told about than by one they discover.

Budgets and authorized hours

Many clients, especially insurers, authorize a fixed number of hours per assignment and expect you to ask before going over. Pursuit’s article on the downsides of insurance work describes the cost pressure in that market. Track hours against the authorization as you go, not at the end:

• Know the authorized hours before you start.
• Check the running total daily on multi-day assignments.
• Ask for more authorization before you pass the limit, with a reason (“subject departed at 15:50; continuing would require an estimated 3 more hours”).
• Record the approval, and who gave it, in the case file.

Unauthorized overage is the most common reason investigators end up writing off hours.

Retainers

Pursuit has argued that PIs should charge a retainer on every job. The reasoning is simple: once you’ve delivered the report, your leverage to get paid mostly disappears. A retainer covers some or all of the expected cost up front, and the invoice draws it down.

Decide your policy and put it in your engagement letter: how much, when it’s due, how it’s applied, when it must be topped up, and what happens to any unused balance. See PI retainer agreements: what to include.

For setting your rates and retainers in the first place, see pricing your investigation services.

Invoices clients don’t dispute

A clear invoice answers the client’s questions before they ask. Include:

• Your business name, contact details and license number (some states require the license number on certain documents; check yours)
• Client name, case or claim reference, and the client’s own reference number
• Invoice number and date, and the period covered
• Itemized time entries, grouped by date or activity, with rate and amount
• Mileage with the rate and total miles
• Expenses, itemized, with receipts available (or attached)
• Retainer applied and balance due
• Payment terms, accepted payment methods and due date

Send invoices promptly, ideally with or right after the report. The longer the gap between delivery and invoice, the more likely the client is to question it.

Make sure the invoice matches the report. If the report says surveillance ran 06:00 to 14:00 on 4 March and the invoice bills ten hours that day, explain the difference (travel time, report writing) in the line items.

Getting paid

• Make it easy. Accept the payment methods your clients use: check, bank transfer and card for individuals.
• Follow up on a schedule. A polite reminder a few days before the due date, another on the due date, and a call when an invoice is late.
• Stop work, politely, when a retainer is exhausted and not replenished, as your agreement says.
• Watch for payment fraud. Fake “updated bank details” emails target small businesses. Confirm any change in payment details by phone on a number you already have.

Keep records

Keep time, mileage, expense and invoice records for as long as your tax obligations and your case-retention policy require. The IRS publishes general guidance on how long to keep business records; your accountant can tell you what applies to you. Billing records can also matter in fee disputes and litigation, so store them with the same care as the rest of the case file.

Tools

Spreadsheets work if you’re disciplined. General-purpose time trackers and accounting software (the kind many PIs pair with their case files) are better at timers, receipts and invoice generation. Case-management software that ties time and expenses to the case record saves double entry and keeps billing consistent with your notes and reports. Whatever you choose, the test is whether you can produce an accurate, itemized invoice for any case in a few minutes.

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