Tech Tip #29 – Know Your Legal Accounting – Advanced Client Costs vs. Reimbursable Client Costs
Not every matter cost is a cost from IRS perspective. Know the difference. Cost booked as advanced client costs (ACC) is really a loan to your client and can’t be deducted when incurred. Cost booked as reimbursable client costs (RCC) is different and can be deducted. How you book is yours and your accountant’s decision but ensure your tool can remember this ALL the time and not ask you to make this decision again and again. If you are handling your business accounting within CosmoLex, we have some handy defaults to take care of this. Under Setup, you have an Accounting Settings section in which you can assign matter types as ACC or RCC. Discuss with your accountant and then set it and forget it!