Internal expense categories control how costs are allocated to your general ledger (GL) accounts when service work is performed at your own expense. Understanding how they work helps ensure your accounting package receives accurate journal entries for internal service jobs and third-party claim variances.
What Internal Expense Categories Do
Internal expense categories are used in three ways:
They are selected on internal customer service jobs to allocate the cost of the service job to a specific GL account.
They are selected when recording third-party service job claim variances, so the variance expense is directed to a specific GL account.
They can be set as the default category within Service Job Types, so the correct category is applied automatically when creating a specific type of internal customer service job.
You need at least one internal expense category for each GL account you want to use when allocating internal service job costs or claim variance expenses.
How Internal Expense Categories Work in Practice
When a service job needs to be performed at your expense — for example, rework for a customer — you select the relevant internal expense category when choosing who pays on the customer order. In this case, an internal expense category such as Rework HHD would be selected to indicate that your business is absorbing the cost.
When the job is completed, Blackpurl sends a journal entry to your accounting package that redirects the sales revenue from parts and labour to the designated rework expense account, rather than recognising it as income.
