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Set Default Accounts for Client Matter Costs

There are several default client cost accounts in your CosmoLex Chart of Accounts. When you set up your accounting, you will want to designate those accounts to which you will allocate your expenses for tax purposes.

Important

We recommend you consult with your accountant, bookkeeper, or a Certified Consultant when you set your accounting defaults. 

1700: Advanced Client Costs
  • Balance sheet account

  • CosmoLex books contingency case expenses to this account and handles reimbursement at settlement. 

  • Many firms use Advanced Client Costs for all matter expenses. As they recover the cost, they allocate it to 1700: Advanced Client Costs.

6610: Reimbursable Client Costs
  • Expense account on the Profit and Loss statement
  • Firms typically use this account for expenses for which they invoice the client contemporaneously with the expectation payments will remain current. As they recover direct (hard) costs, they allocate them to 4200: Reimbursed Client Costs (Direct), which is an income account.

    Note

    Advanced Client Costs and Reimbursable Client Costs are expenses the firm has advanced on the matter. The amounts are considered loans to the client.

4250: Inhouse Reimbursed Client Costs (Indirect)
  • Income account
  • As you recover indirect (soft) costs, the system allocates them to this account.
6620: Non-Reimbursable Client Costs
  • Expense account
  • Used to enter Non Billable and No Charge matter costs
  • Never to be recovered
  • Available for use only when posting to a matter that falls under a billing method assigned to the 6610: Reimbursable Client Costs (Expense) Account

Designate a Default Account for Expenses

To designate a default account for expense allocation:

  1. From the left navigation panel, click Setup.
  2. Atop the Setup left navigation, click Firm Settings.
  3. From the tabs atop the Firm Settings screen, click Accounting.
  4. Atop the Accounting screen from the Default Accounts for Client Costs Posted to Matters section drop-down, click the Hourly Matters field.
  5. From the drop-down, click your desired default account.
  6. To the far right of the field, click the check mark to confirm your selection.
  7. Follow steps 5 – 6 for the remaining fields.  

Change the Default Account for Client Costs

You may want to change your default account for client costs. For example, you may be using Advanced Client Costs (Asset Account) and now want to use Reimbursable Client Costs (Expense Account).

To change the default account:

  1. Change the default account at the firm level as documented above.
  2. Edit previously recorded costs
Updated on March 31, 2022

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