This article guides you through the process of syncing expenses and bills from QuickBooks Online to LeanLaw, impacting the way expenses are recorded in your financial records. It’s advisable to consult your accountant to determine if this approach is suitable for your firm.
LeanLaw manages two categories of expenses that are included in your client invoices:
1. Hard Expenses (created in QuickBooks Online): This is an actual expense that you paid or will pay to a vendor. Common examples are filing fees, expert witness payments, and court report costs.
2. Soft Expenses (created in LeanLaw): These are expenses you seek reimbursement for from your client but haven't directly paid to a vendor. Common examples are overhead costs, photocopy expenses, and mileage.
Tip: It’s important to determine whether you want to allocate hard expenses and soft expenses into separate accounts or a single account. We suggest using distinct accounts for hard and soft expenses to enhance clarity in reporting and accounting.
To begin, go to Settings and select QuickBooks. In the QuickBooks Integration menu, click on Edit Expense Settings to access the Expense Configuration menu.
In the Expense Configuration menu, you can view the current settings and definitions. The example below illustrates that while an Account and Product/Service for expenses created in LeanLaw are already configured, the expenses from QuickBooks Online have not been synchronized.
To synchronize expenses generated in QuickBooks Online, click the Change Settings button and follow the steps outlined below.
Step 1 - Sync Expenses
Select Enable QuickBooks Sync, then click Next.
Step 2 - Account
In this step, you can configure the QuickBooks account that LeanLaw will sync with. You can choose an existing account from the dropdown menu. Common expense accounts are labeled as “Prepaid Expenses,” “Reimbursable Expenses,” or “Advanced Client Cost.”
Alternatively, you can check the Create a new account in QuickBooks option for LeanLaw to set up a new account for you.
After selecting an existing account or checking the box to create a new account, click Next.
Step 3 - Product/Service
Next, choose or create a Product/Service for the account. This will be utilized for expense line items on invoices.
The example below illustrates how to create a new Product/Service by selecting the Create a Product/Service for the account checkbox.
Step 4 - Date Range
If you select an existing account in Step 2, you’ll have the option to sync expenses starting from a specific date.
We suggest choosing a date that’s far enough back to capture any unbilled items but not so far that it brings in too many expenses that have already been billed.
Note: Including too many billed expenses can clutter your workspace and create unnecessary cleanup tasks for you.
Step 5 - LeanLaw Expenses
Next, decide whether expenses created in LeanLaw should be recorded in a separate account from those in QuickBooks Online or if they should share the same account.
Tip: For reporting and accounting clarity, we recommend using a different account.
If you prefer soft expenses entered in LeanLaw to be categorized in the same account as hard expenses in QuickBooks Online, select the Same option, then click Save Changes, and you're all set!
If you would like to use a separate account for soft expenses in LeanLaw (which is our recommendation), select the Different option, and then click Next.
Step 6 - Account
Choose an existing account for soft expenses from the drop-down menu in LeanLaw, or create a new income expense account in QuickBooks, then click Next.
The example below demonstrates how to select an existing account from the drop-down menu. To set up a new account in QuickBooks for recording soft expenses, check the “Create a new account in QuickBooks” box.
Step 7 - Product/Service
Choose an existing Product/Service for soft expenses from the drop-down menu in LeanLaw, or create a new one for the account, then click on Save Changes.
In the example below, an existing account is selected from the drop-down menu. To create a new Product/Service for recording soft expenses, check the box labeled Create a Product Service for the account.
Step 8 - Expense Configuration
You can now view your expense configurations - the Account and Product/Service for the two expense types.
You have the option to include the vendor name in the expense description. If you check the box labeled “Include vendor/payee names in descriptions,” the vendor (or payee name) will be added to the beginning of the description.
If you’re a LeanLaw Pro user, you can also select the “Sync attachments from QuickBooks to LeanLaw” option to synchronize attachments. Click here for details on this and other features, such as enabling expense attachments on all invoice emails!
After reviewing the Expense Configuration to make sure everything is entered correctly, click Done.
Now that your QuickBooks Expense Settings are synced, you’ll see the expenses from the “Prepaid Expenses” account in the Expense tab of the product, ready for billing to clients!
If you have a LeanLaw Pro subscription, you can also select the “Sync attachments from QuickBooks to LeanLaw” option to sync any attachments.