a versatile tool for tracking expenses when other types don't apply |
A soft cost is generally used to track expenses that do not have a disbursed amount. That is, there was no fixed outlay from the company for a product or service. For example, you might charge your client $20 a day for printing, but you don't keep track of every page and every ink cartridge used. Or you charge your client a software licensing fee of $5k, but because it is software, there is no real outlay in it's cost. Some common examples of using soft costs. Costs billed to a client, but for which a specific disbursement was not made
Amortize Expense
Issuing Credits
This page explains the basics of soft costs, which is a type of expense document. Please see these additional help topics if you don't know what an expense document is. |
Watch Recurring Revenue Management Webinar (go to 37:10) for a quick demonstration on managing soft costs. |
There are quite a few permissions that affect soft costs. As a soft cost is a type of expense document, you should review that help page so that you understand what higher level permissions inherit down to here.
To create or edit soft costs you must have the cost center permission Maintain Soft Costs.
Find and edit soft costs from the Financials | Expense Documents menu item.
Soft costs can optionally be associated with a resource. This is useful for assigning profitability to a resource who is responsible for the expense. For example, Tim sells services to a client for $10k. You want Tim's profitability to reflect this.
When you first create a soft cost, you must assign a cost center. Once a cost card moves beyond the draft status you are no longer allowed to change the cost center. This is to keep approval permissions and accounting transactions consistent throughout the lifecycle of the document.
Soft Costs follow the standard expense approval process that all cost cards use. To learn more about how to approve expenses, please see the help page Expense Approval. A short description of the approval process is listed below.
Many settings that affect the workflow of soft costs are available on the System Settings Editor Cost Tab.
Soft costs may no longer have expenses added once all the expenses are marked Approved to Pay. You can optionally tighten this restriction to soft costs where all cards are marked Approved with the system setting Lock expense documents when fully approved.
If you are the same person who creates and approves vendor invoices you might want to change a system setting so that all approvals are done with a single click. You can do this from the System Settings Editor Cost Tab by ticking the checkbox for the setting called Automatically approve soft costs.
Common actions around soft costs.
The expense document Flex Search allows you to find expense documents by type. See screenshot below.
Go to https://app.projectorpsa.com/expensedocsearch. Or go to Financials | Expense Documents.
Find a soft cost. Then click on the document number.
Find a soft cost. Tick the checkbox for it. Click Delete.
Once you start modifying a soft cost, you can perform the following actions.
Click the small button with the plus icon 
, then fill out the cost card details that will be added to the soft cost batch document.
Select the cost cards you want to remove by clicking the check box. Then click the x icon 
in the small button.
You will be asked to confirm if you want to delete the selected cost card(s). This is permanent and cannot be undone. Click the Delete button to confirm.
Click the down arrow icon next to the check box to "drill in" to a cost card and make your edits.
Once you have selected a cost card to edit, the cost card will open on your full page. Once you've made your edits and clicked Save in the top right corner, you will be returned to the expense document that the cost card is related to.
Click the pencil icon next to the Soft Cost Batch details to make in-line edits.
After making your edits, click the save icon.
Some common cases of using Soft Costs
In the event that you overbill a client, you or the client may be unwilling to void and reissue the original invoice. In this case, you issue a negative soft cost to the client which fixes the accounting side of the problem. If the credit is for time cards, then keep in mind that you will be moving lost revenue from the time side of the equation over to the expense side. Keep in mind this may affect your reporting. If you give bonus' based on average billing rate for time, the billing rates won't be exactly accurate given you have offset some of that time with a cost credit.
In the event that you receive a large, up front expense, you may want to amortize it over time. For example,
a versatile tool for tracking expenses when other types don't apply |
A soft cost is generally used to track expenses that do not have a disbursed amount. That is, there was no fixed outlay from the company for a product or service. For example, you might charge your client $20 a day for printing, but you don't keep track of every page and every ink cartridge used. Or you charge your client a software licensing fee of $5k, but because it is software, there is no real outlay in it's cost. Some common examples of using soft costs. Costs billed to a client, but for which a specific disbursement was not made
Amortize Expense
Issuing Credits
This page explains the basics of soft costs, which is a type of expense document. Please see these additional help topics if you don't know what an expense document is. |
Watch Recurring Revenue Management Webinar (go to 37:10) for a quick demonstration on managing soft costs. |