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Hard Costs (aka Disbursements) and Soft Costs (Expenses)


Hard Costs/Disbursements vs. Soft Costs
Enabling or Disabling Hard Costs/Disbursements and Soft Costs
Entering Expenses as Hard Costs/Disbursements or Soft Costs

Hard Costs/Disbursements vs. Soft Costs

When recording the payment of expenses on behalf of a client, some firms differentiate between hard and soft costs.

Hard costs (aka Disbursements in some European countries) are charges incurred on behalf of a client that requires a direct payment by the firm to a vendor. For example, if a firm writes a check for a court filing fee, it is considered a hard cost.

Soft costs are expenses that are charged to the client but a direct payment is not made to a vendor. For example, if a firm charges for photocopies using their own photocopy machine, they did not pay a vendor directly for those specific copies.

Enabling or Disabling Hard and Soft Costs

To enable or disable hard costs/disbursements and soft costs:

  1. Go to the Settings menu
  2. Click Billing
  3. Click Expenses
  4. Click the checkbox for Enable recording of soft and hard costs for reimbursable expenses
  5. Click Save expenses settings

Entering Expenses as Hard Costs/Disbursements or Soft Costs

To enter expenses as hard or soft costs:

  1. Click the Create new button, or the New expense button
  2. In the New expense entry window:
    1. Select if the expense is a hard or soft cost
    2. Select the expense category (optional)
      1. For hard costs, enter the total amount you paid on behalf of the client
      2. For soft costs, enter the quantity of and the rate for the expenses
    3. Select the relevant Matter
    4. Add a description
    5. Ensure the date is correct
    6. Ensure the firm user is correct
    7. Click Save entry
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