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Using and Working with Expense Recovery Accounts

PCLaw's default G/L chart of accounts contains both expense and expense recovery accounts. For example, you can find both a Postage Expense (5530) and a Postage Recovery (5531) account. PCLaw classifies both types of accounts as an expense account that affects net profit. You can either use both accounts to separate your up front expenses from the amount you recover or only use the expense account to track the up front costs and the recovered costs together.

• Using Both an Expense Account and Expense Recovery Account
• Using only an Expense Account

Using Both an Expense Account and Expense Recovery Account

Take the following steps to separate your initial cost of postage from the amount you recover for mailing items on behalf of your client:

1. Enter a General Check (Cheque) when you buy postage stamps for your firm and enter 5530 (Postage Expense account) in the G/L Account column on the General Check window.
2. Enter an Expense Recovery, and enter 5531 (Postage Recovery account) in the G/L Account column on the Expense Recovery window when you use postage on behalf of a client.

The following table shows the debits and credits that appear on the G/L when you use both an expense account and expense recovery account:

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Using only an Expense Account

Take the following steps to only use a single expense account to track both your initial cost of postage and the amount you recover for mailing items on behalf of your client:

1. Enter a General Check when you buy postage stamps for your firm and enter 5530 (Postage Expense account) in the G/L Account column on the General Check window.
2. Enter an Expense Recovery, and enter 5530 (Postage Expense account) in the G/L Account column on the Expense Recovery window when you use postage on behalf of a client.

The following table shows the debits and credits that appear on the G/L when you use both an expense account and expense recovery account:

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