Billing expenses on to your clients should be simple and easy. This article describes how.
Think about two types of expenses:
- Expenses created in LeanLaw don't have a corresponding outgoing expense. This might be mileage, or a general overhead charge. We sometime call these Soft expenses.
- Expenses created in QuickBooks originate from bank or credit card statements, or vendor bills. They are expenses that your firm have paid, or will pay, and need to be billed on to a client. These expenses will be visible in LeanLaw for billing purposes. These are Hard expenses.
Expenses Created in LeanLaw
Expenses are created in LeanLaw in the expenses tab and clicking "Create expense". These expenses do not have a corresponding entry in QuickBooks because these is no outgoing expense to match it. They will just appear as line items on invoices.
Expenses Created in QuickBooks
Expenses, Bills and Checks in QuickBooks can be made available in LeanLaw for billing. We recommend having a "Reimbursable Expenses" account and assign all expenses that are billable to that account. For other options, see:
Here is an example of from QuickBooks of two expenses that are assigned to the "Reimbursable Expenses" account.
If we click into the $5,000 Bill, we can also see that it is assigned to the "Sample Client":
Note that assigning expenses to clients from QuickBooks is only available to certain QuickBooks subscriptions. Don't worry: if you don't have it you can assign the client from LeanLaw.
Let's head over to our LeanLaw account. Because LeanLaw is watching the "Reimbursable Expenses" account, we will immediately see the expenses in the "Expenses" tab:
One expense appears in the list with a green dot because it was already assigned to a client (the $5,000 one). The other expense appears in the yellow box saying "Assign Expenses" which when we click on it, will allow us to assign a client and matter to the expense:
Click on the expense to assign it to a client and matter:
Once assigned, our list of expenses include the two expenses from QuickBooks, plus an additional one (without the green dot) which we entered in LeanLaw:
Head to "Billing" to invoice the expenses along with your time. Note that the "Ready to Bill" page will also have the yellow box if there are any unassigned expenses. You should not start billing until all expenses are assigned.
The Reimbursable Expenses Account
Once the expenses are invoiced and sent to QuickBooks, the expenses created in QuickBooks will appear as line items in the Reimbursable Expenses account and will cancel out the outgoing expense.
This allow us to make sure that we have billed out all the expenses that were marked reimbursable. As long as outgoing expenses are assigned to the account, when the account balance is zero, it means that we billed all those expenses on to client.