- Generate a hard cost that is not billable (Screen A), and then a billable soft cost (Screen B) for the same transaction.
- The hard cost generates the Expense and Payment for that Expense. The soft cost will then generate the unbilled item. Once invoiced and paid, it is put in the Soft Cost Reimbursement Income Account on the books.
- This method generates an extra step for each Client Reimbursement Expense transaction and will not directly link the hard cost and soft cost together. We suggest that you create detailed and unique descriptions to match them.
- Generate a billable hard cost as regular (Screen C). This generates the Expense and Payment for that Expense, as well as generates the unbilled item that once invoiced and paid will be entered into the same account selected under the hard cost record, undoing the Expense.
- Lets assume a firm categorizes/selects one unique account for only their Client Expenses/Reimbursements when generating the hard costs.
We can then go into the General Ledger and export it at the end of the year before closing the books, or as often as you like to get the Total Amount that was credited/undone.
Using that amount we can create a Journal Entry to move the credited/undone reimbursements from that unique client expense account to an Income Account.
The journal entry (Screen D) would debit to the Client expense Account for the total amount Reimbursed and credit the Income Account.
- This method generates an extra step for each time you would like to move the Reimbursements from an Expense to an Income Account. It will not be directly linked from the Journal Entry to hard cost expenses and reimbursements.
If you plan on doing this once a year for tax purposes, right before closing your books, this may be the best method.