Articles on: Expense

Expense GL Accounts and Journal Entries

General Ledger Accounts

New default GL accounts are set up for a contract and other cost recognition with the following account types:

Account NumberAccount NameAccount Type
6000Expense Clearing (EC)Expense Clearing
1000Deferred Expense (DE)Deferred Expense
5000Expense Recognized (ER)Expense Recognized

Expense Deferral & Recognition

Whenever a Contract Cost or Other Cost is added, RevRec books the following entry and establishes a deferred cost:

Deferred ExpenseXXX
Expense ClearingXXX

If the Amortization method is selected as “Point in Time”, then RevRec recognizes the entire amount in the current period. If the amortization method is “Ratable” then RevRec capitalizes the cost over the life of the asset and amortizes it for each period. RevRec books the following entry to recognize the expense:

Expense RecognisedXXX
Deferred ExpenseXXX

General Ledger Account Mapping

RevRec’s expense recognition feature comes equipped with the default GL mapping – one account for each account type. For example, a single deferred expense and expense amortization account for the company.

RevRec also allows you to edit the mapping based on your accounting system accounts. For more complex setups you can use other fields such as Product Type, department, class, location, or a different custom field to map entries to specific accounts, similar to revenue.

Journal Posting

Journal entries for expense-related transactions can either be posted manually or directly to an integrated third-party accounting system, provided that you have integrated one with RevRec. Ensure that the account names are consistent between the accounting system and RevRec.

Updated on: 06/07/2022

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