Add a Hard Cost

Hard cost expenses refer to out of pocket transactions and their subsequent reimbursement. In CosmoLex, you record both in the same screen.

These expenses include items such as:

  • Filing fees
  • Postage
  • Expert witness fees
  • Court costs

Tracking these reimbursable costs separately provides your firm with accurate revenue accounting to offset your Profit and Loss expenses. 

Important

If your firm does not use CosmoLex for business accounting, then we recommend you enter your expenses as soft costs. If, in the future, you want to enter the associated transactions, you can link your recorded soft costs to those transactions to create hard costs.

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Add a Hard Cost

You can add a hard cost from:

  • The Global Shortcut icon’s drop-down – Expense (Hard Cost)

global-shortcut-hard-cost

right-navigation-hard-cost

When you add a hard cost from Matters and Activities, you are selecting the matter prior to adding the hard cost as opposed to selecting it within the Expense – Hard Cost screen. 

From Matters

To add a hard cost:

  1. From the left navigation panel, click Matters.
  2. In the Matters screen, single-click the matter to which you want to add a hard cost.
  3. To the far right of the screen, in the black right navigation, click the dollar sign icon.
    The Expense – Hard Cost screen opens.  
  4. The Date field populates with today’s date. Click the drop-down to specify a different date, if needed.
  5. In the Amount field, enter the amount.
  6. For the Calc box, take the appropriate action:
    • Calc Box Checked
      1. In the Total field, enter the total amount.
        The system calculates the GSTHSTQST and PST, as applicable, and auto-populates their fields.
    • Calc Box Unchecked
      • In the GSTHSTQST and PST fields, as applicable, enter the taxes paid.
        The Total field auto-populates with the bill’s total.
  7. The Type field will default to Withdrawal
  8. In the Method field, use the drop-down to click the payment method.
  9. In the Check# field, take the appropriate action:
    • Check to be Printed
      1. Leave the To be Printed box checked.
    • Check Was Printed
      1. Uncheck the To be Printed box.
        The Check# field becomes editable.
      2. Enter the check number.
  10. In the Pay To field, enter the payee’s name.
  11. (Canada Only) In the Address section, enter the payee’s mailing address.
  12. In the Bank field, use the drop-down to click the appropriate bank. If you are paying via credit card, click the appropriate credit card bank.
  13. In the Memo field, enter a memo or click the drop-down to select one.
  14. In the Memo2 field, include further details for internal purposes. This will not print on client documents.
  15. In the Account field, CosmoLex determines the default account (Chart of Account) based on your accounting settings.
  16. Leave the Post as matter expense box checked to post the hard cost to the matter.
  17. (Canada Only) Check or uncheck the Disbursement Incurred as Agent box.
  18. Click the appropriate radio button:
    • New expense card
      • For new expenses associated with a matter
    • Existing expense card
      •  For entering a transaction linked to an existing soft cost expense
      • Once you choose the matter, existing soft cost choices matching the transaction will display.
      • If you choose an existing soft cost, the remainder of the screen populates. Skip to step 28.
  19. In the Matter field, enter the first few characters of the client or matter name.
    The field populates with a drop-down of potential matches.
  20. Click the appropriate matter.
  21. In the Expense field, use the drop-down to click an expense. You can customize your list items.
  22. In the TimeKeeper field, use the drop-down to click a timekeeper. You can set a default timekeeper.
  23. In the Billing Status field, use the drop-down to click a billing status.
    Billable
    • Default option
    • The system includes it in the unbilled balance and displays it on your next invoice.
    No Charge
    • Items you are completing free of charge but want to display on the invoice. For example, Value: $200 Charge: $0.00.
    Important

    When entering ‘No Charge’ Expenses, make sure the Account field is set to 6620: Nonreimbursable Client Costs.

    Non-Billable
    • Items you want to track for internal rather than billing reasons
    • Not listed on the invoice 
  24. In the Description field, enter your desired description, if applicable. You can set default descriptions when customizing your list items and create shorthand descriptions for quick, easy entry.
  25. Click the down arrow for Tax Settings
  26. Click Taxable, if applicable.
  27. The tax rate fields display your firm’s default settings. If yours is a Canadian firm or a US firm in a state that applies tax to expenses, you can use the automated tax calculation feature. You can also override these settings.  
  28. In the Documents section, add documents, if desired.
  29. In the lower left corner, check the Remember Payee box to add them to your Payees list, if desired.
  30. In the lower right corner, take the appropriate action:
    • Click Save and New to save this hard cost and add another.
    • Click Save to add this hard cost and return to the Matters screen. 

      The system saves your hard cost and returns as applicable.

From Bank Transaction

You can post a transaction to your operating account, then link it to a matter to retroactively create a hard cost expense.

The result is the same, the location of entry depends on your firm’s workflow.

If your bookkeeper manages hard costs and prefers to work in the Accounting section, they can enter transactions through the operating/general account and assign them to their respective matters. Adding hard cost expenses this way can be advantageous if your firm incurs a cost, then later decides it must be posted to a specific matter.

To add a hard cost from a bank account:

  1. Create a withdrawal transaction in your operating bank. 
Note

If your firm is based in Canada or a US state that applies tax to expenses, you can use the automated tax calculation feature.

  1. When completing the transaction, check the Post as matter expense box.

From Accounts Payable

If this is an anticipated cost, you can create an Accounts Payable (AP) bill and post it to the matter for payment at a later date.

Updated on January 4, 2022

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