Client and Matter Accounting

Client and Matter Accounting

Client and Office ledger

Being a system specifically designed for Legal Accounts, Insight Legal comprehensively deals with client and matter accounting. There are separate sections on the ledger for client, office and deposit accounts but they all reside within one client ledger, meaning you can easily view and manage all the different transactions that take place.

On the ledger, all transactions are listed in date order with a full history of debits and credits as well as a running balance. The totals for each account are summarised on a Financial Summary tab alongside other useful information such as the costs quote, the value of unbilled disbursements and the date the matter was last billed.
On the ledger itself, you can click on any transaction and see further details such as when it was posted, which other accounts or ledgers it affects and whether or not it has cleared the bank.
In addition to a full ledger card for each matter, Insight Legal provides a large amount of drill down information. There are additional tabs for items such as bills, allowing you to see easily and in one place what bills have been issued, any payments made against them, the allocation of costs between fee earners and also the bill’s current status. The same applies for disbursements, where you can see all disbursements incurred, whether or not they have been paid out and whether or not they have been billed.
There are a large number of posting routines built in to Insight Legal, including general debits and credits to any part of the ledger, transfers either between different accounts within the same matter or between different files, disbursements, bills and bill payments.

Disbursements

Disbursements are an integral part of most client ledgers. As a Solicitor, there are likely to be times when you have to make payments to third parties in order to progress the Client’s case and, of course, you will need to record details of those payments on your ledgers. Insight Legal has specific disbursement posting routines to do exactly that.

If you are in the Republic of Ireland, you will find that the Disbursement Types allow you to control and report on Third Party Returns.

It may be that the disbursement was paid directly by you from your office account. It may be that the Client had already paid monies in to your client account to cover such disbursements so you make the payment straight from there. You may want to record a disbursement that has not yet been paid, but that you know or anticipate will need to be paid out in the future. These are just some of the scenarios that are covered by the Insight Legal disbursement posting screens.

Below is some further information on the different disbursement types that we cover:
  • Disbursements paid directly from office accountThese are shown on both the office side of the client ledger and also the office account
  • Disbursements paid from petty cash These are shown on both the office side of the client ledger and also on the petty cash account
  • Disbursements paid from monies held on client account A specific client disbursement posting type which is shown on both the client side of the client ledger and also the client bank
  • Disbursements paid from a nominal ledger When you want to show the disbursement as having been incurred, but the other side of the posting sits on a nominal ledger until you are ready to pay it
  • Disbursements paid from a purchase ledger When the invoice for a disbursement has been received but has not yet been paid, the disbursement will be shown on both the office side of the client ledger and also against the relevant purchase ledger supplier
  • Anticipated disbursements Anticipated disbursements are memo entries. They are a way of recording something that you anticipate having to pay out in the future
  • Prebilled disbursements A prebilled disbursement is one that you have included in a bill to your client, but not paid out yourself yet.

Bills

Raising a bill consists of a number of different elements. Of course the bill needs to be recorded on your client’s ledger so that you can see how much they owe you, but it also needs to be recorded in your firm’s accounts so that you can analyse your billing in each area of law that you deal with. In addition to recording the bill in the accounts system, you may want to draft an invoice document to be sent to the client and recorded as part of the matter document history. Insight Legal has two different bill posting options so that each firm can adopt the procedures that are most appropriate.

For firms where the fee earners or support staff are responsible for drafting the bills, Insight Legal offers a Bill Request function. Using this method, the user will be presented with an on screen billing guide from which they can view and select time recording items and disbursements to calculate the values of the bill.

For firms where the accounts user is responsible for the billing routines, the whole process can be done from the financial posting screen. If you just want to record the bill on the financial ledger then that is fine, but you also have the option to produce the paper copy of the bill at the same time.
Whichever billing option you choose, the billing routines ensure that you are presented with time recording and disbursement items for selection, that VAT on costs is automatically calculated and that the allocation between fee earners is accurate. Of course there are some other useful features in there too, such as the option of having the system automatically generate your invoice numbers and having a full breakdown of your time recording included within the bill. Further information on the billing routines and what Insight Legal can produce is included in our Billing section.

Interest Calculation

There are two different methods of interest calculation within Insight Legal.

The first is an ad hoc interest calculator which can be used for calculating interest on fixed sums using whatever date range and rates you choose. This simple calculator is most suited to working out projected interest if you wanted to give an estimate either to the client or the fee earner.

The other method of interest calculation is based on the client ledger. By right-clicking on a client ledger you have the option of exporting that ledger card with an interest calculation. Upon selecting this option, Insight Legal opens an Excel spreadsheet containing the relevant client transactions. All you need to do is enter the agreed interest rate and the amount of interest due over the course of the matter will be calculated, even including times when balances fluctuate.

Deposit Accounts

As well as your standard client and office accounts, Insight Legal allows for an unlimited number of deposit accounts. These may be accounts such as high interest accounts used by a number of different client ledgers, or designated deposit accounts for a specific client or matter.

These deposit accounts are treated as an integral part of any matter, with the deposit account being visible next to the office and client accounts on each client ledger.

The posting routines allow for amounts to be posted either straight to deposit or by way of transfer from the general client account. For items such as interest, it is also possible to transfer monies either from client account or from a nominal ledger.

SRA Accounts Rules Compliance

Fundamental to any accounts office is compliance with the SRA Accounts Rules (formerly known as the Solicitors Accounts Rules). It is the basic principle of the rules that client monies must be kept safe, but of course that is not all there is to it!

Amongst other things, firms must keep separate ledgers for each matter, must ensure that any client ledger is never put in to debit and that the office side of any client ledger is never put in to credit. These are all areas where Insight Legal can provide invaluable assistance.

On each posting screen, Insight Legal will calculate the new balance on the ledger for you, so even before committing a posting you can check what the new balance will be. In addition, if you were to enter any posting that would put your client ledger in to debit or your office ledger in to credit, a message will be displayed on screen giving you the relevant warning and giving you the option to abort or amend the posting at that point.

In addition to compliance with these fundamental rules, there are valuable tools and reports for the COLP or the COFA to assist them in their roles. This can range from simple functions such as conflict of interest checks to more complex reports such as the dormant matters report, which can highlight matters which have had no movement for a period of time but where you still have a residual balance on client account.