Add an expense line—Contracts

An expense is a cost incurred to obtain or fulfill a contract with a customer. The ASC 606 accounting rules require you to amortize contract acquisition expenses over the contract term.

Note the following expected behavior regarding expenses:

  • For termed contracts, you can add expenses to the contract and/or to a contract line.
  • For evergreen contracts, you can only add expenses to the contract.
  • For kit contract lines, you can add expenses to the contract or to the kit component contract lines. You cannot add an expense to the kit item contract line.

Typically, a contract-level expense is a cost associated with obtaining the contract, such as sales commissions. A contract line-level expense is a cost associated with the contract line item, such as license royalties. You can report on both types of expenses at the contract level.

When determining whether to add an expense at the contract or contract line level, consider that contract line expenses are canceled if you cancel a contract line. Contract expenses are canceled if you cancel the contract. If an expense shouldn't be canceled in the event a contract line is canceled, enter the expense at the contract level.

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Contracts

Regional availability

  • Australia

  • Canada

  • South Africa

  • United Kingdom

  • United States
User type Business
Permissions Contract: List, Add, Edit, Post
Restrictions

For evergreen contracts: You can only add expenses to the contract.

For kit contract lines: You can add expenses to the contract or to the kit component contract lines. You cannot add an expense to the kit item contract line.

Add an expense from a contract

  1. Go to Contracts > All > Contracts.
  2. Find the contract to which you want to add an expense line.
  3. Select More actions > Edit at the end of the row.
  4. Do one of the following:
    • To add an expense to the contract, select Add located above the top-left corner of the Expense lines table.
    • To add an expense to a contract line, select the pencil icon in the desired contract line row, select the Expenses tab in the Contract line dialog box, then select Add located above the top-left corner of the Expenses table.

      The Expense detail dialog box appears.

  5. Use the Item selection list to select the desired expense item.
  6. In the GL posting date field, use the calendar tool to select the date the expense will post to the Deferred Expense and Expense Accrual accounts.
  7. (Multi-currency companies only) If applicable, change the Exchange rate date and Exchange rate as desired.
  8. Enter the total Amount to be expensed.
  9. Select the desired Dimensions. The Location selection list only displays the location or entity selected in the contract or children of that location/entity.
  10. In the Templates section, use the dropdown list to select an expense template for at least one expense journal. If you’re using two sets of books, select an expense template for each expense journal.

    Your field labels for Expense template 1 and Expense template 2 will display the journal symbols selected in the Configure Contracts page for Expense journal 1 and Expense journal 2. For example, if Expense journal 1 = EXPJ-NEW and Expense journal 2 = EXPJ-OLD, the Expense popup will display the following fields: EXPJ-NEW, Start date, End date, EXPJ-OLD, Start date, End date.

  11. Use the calendar tool to select the desired Start and End dates for each template.
  12. Select Post.

    The popup window closes and the expense appears as a row in the Contract expenses table.

  1. Go to Contracts > All > Contracts.
  2. Select Edit next to the desired contract.
  3. Do one of the following:
    • To add an expense to the contract, select Add located above the top-left corner of the Expense lines table.
    • To add an expense to a contract line, select the pencil icon in the desired contract line row, select the Expenses tab in the Contract line dialog box, then select Add located above the top-left corner of the Expenses table.

      The Expense detail dialog box appears.

  4. Use the Item selection list to select the desired expense item.
  5. In the GL posting date field, use the calendar tool to select the date the expense will post to the Deferred Expense and Expense Accrual accounts.
  6. (Multi-currency companies only) If applicable, change the Exchange rate date and Exchange rate as desired.
  7. Enter the total Amount to be expensed.
  8. Select the desired Dimensions. The Location selection list only displays the location or entity selected in the contract or children of that location/entity.
  9. In the Templates section, use the dropdown list to select an expense template for at least one expense journal. If you’re using two sets of books, select an expense template for each expense journal.

    Your field labels for Expense template 1 and Expense template 2 will display the journal symbols selected in the Configure Contracts page for Expense journal 1 and Expense journal 2. For example, if Expense journal 1 = EXPJ-NEW and Expense journal 2 = EXPJ-OLD, the Expense popup will display the following fields: EXPJ-NEW, Start date, End date, EXPJ-OLD, Start date, End date.

  10. Use the calendar tool to select the desired Start and End dates for each template.
  11. Select Post.

    The popup window closes and the expense appears as a row in the Contract expenses table.

Add an expense from the Expense lines list

  1. Go to Contracts > All and select Add (circle) next to Expense lines.
  2. Use the Contract dropdown list to select the desired contract.
  3. If this expense is associated with a contract line, use the Contract line dropdown list to select the desired contract line number. Otherwise, leave this field blank.
  4. Use the Item selection list to select the desired expense item.
  5. In the GL posting date field, use the calendar tool to select the date the expense will post to the Deferred Expense and Expense Accrual accounts.
  6. (Multi-currency companies only) If applicable, change the Exchange rate date and Exchange rate as desired.
  7. Enter the total Amount of the expense.
  8. Select the desired Dimensions. The Location selection list only displays the location or entity selected in the contract or children of that location/entity.
  9. In the Templates section, use the dropdown list to select an expense template for at least one expense journal. If you’re using two sets of books, select an expense template for each expense journal.

    Your field labels for Expense template 1 and Expense template 2 will display the journal symbols selected in the Configure Contracts page for Expense journal 1 and Expense journal 2. For example, if Expense journal 1 = EXPJ-NEW and Expense journal 2 = EXPJ-OLD, the Expense popup will display the following fields: EXPJ-NEW, Start date, End date, EXPJ-OLD, Start date, End date.

  10. Use the calendar tool to select the desired Start and End dates for each template.
  11. Select Post.

Set up an expense for immediate recognition

Say you have an expense that you want to recognize immediately—you do not want to amortize it. Although Sage Intacct requires you to select at least one expense template for every expense you create, you can just enter the same date for the template start and end dates to create an expense "schedule" that contains one amount to be posted. Then just post the amount whenever you want.

  1. Add the expense to the contract or contract line.
  2. In the expense's Templates section, select an expense template for at least one expense journal. If you’re using two sets of books, select an expense template for each expense journal. It does not matter which template you use as Intacct will only schedule one amount.
  3. Set the template Start dates and End dates to the same desired date. For example, March 4.
  4. Save the expense.

    Intacct creates an expense schedule with one scheduled posting amount. You can then post this amount per your company's expense recognition process.