USA Proper GL acct for spend analysis on software subscriptions for professional services

[Vickyhsd]

Good morning. We are a technology-based consulting firm and have a decent amount of spend on various different online tools/software subscriptions that our consultants use in order to provide services to our clients. Many of these are used across clients and can’t really be expensed or tied directly to a specific client. What would be the best GL account to which to include these types of tools?

• A General COGS account falling above the net profit line?

Or under an SG&A account:

• General Office Admin account b/c we use these the way some firms might use paper, pens, printers, other office supply type expenses that enable workers to do their jobs?
• Software expense? These are generally software type products but seems like this doesn’t actually help you tell where you are spending the money (what does this software enable you to actually DO)?
• Dues/Subscriptions account? They are after all mostly being paid for on a subscription (monthly charge to card or debit from bank acct) basis?

 

[StanleyR1]

Based on the information you provided, I don't think COGS would be appropriate. I would be inclined to book it as Software Expense. But if the tools are used exclusively by your consultants, it might be more meaningful to book it as part of your cost of consultants.

 

[Vickyhsd]

Thanks! Appreciate that feedback.