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Frequent Explorer **

Law Firm: Advance Client Costs - Journal Entries

Hello,

 

I have an other asset account - "Advance Client Costs" with sub accounts for court costs and filing fees. I'm trying to understand the process of billing the client and receiving the reimbursement. Will it first be a debit to client reimb. expense and credit to the advance client costs account, then when reimbursement is received a debit to advance client costs account and credit to client reimb. income?

 

Thank you.

Solved
Best answer 10-19-2019

Accepted Solutions
Established Community Backer ***

Re: Law Firm: Advance Client Costs - Journal Entries

QB is not a journal entry type of accounting program, and using journal entries often cause issues down the road with reports.  QB will sometimes ignore journal entries when creating reports.

 

In QB, turn on billable expenses in preferences, and to track reimbursed expenses as income.
you can also set a mark up for billable expenses if you wish.
Then open the chart of accounts and edit the account that you will post billable expense to. On the account screen there is a check mark box to track reimbursed expenses in an income account, select the income account


Then you pay the expense using that expense account, select the client name and mark it billable.
When you create the invoice, use time costs to bring the billable expense to the invoice.

View solution in original post

2 Comments
Established Community Backer ***

Re: Law Firm: Advance Client Costs - Journal Entries

QB is not a journal entry type of accounting program, and using journal entries often cause issues down the road with reports.  QB will sometimes ignore journal entries when creating reports.

 

In QB, turn on billable expenses in preferences, and to track reimbursed expenses as income.
you can also set a mark up for billable expenses if you wish.
Then open the chart of accounts and edit the account that you will post billable expense to. On the account screen there is a check mark box to track reimbursed expenses in an income account, select the income account


Then you pay the expense using that expense account, select the client name and mark it billable.
When you create the invoice, use time costs to bring the billable expense to the invoice.

View solution in original post

Frequent Explorer **

Re: Law Firm: Advance Client Costs - Journal Entries

Hey Rustler,

 

Thanks for the reply. That makes much more sense. I assume I don't even have to use the 'advanced client costs' asset account at this point--Instead I created 'reimbursable client expense' and 'reimbursed client income' accounts. I see you on a lot of other posts and appreciate the time you take to help us out. 

 

Take care!

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