Expenses and Cost Tracking - Tutorial and Video – Law Ruler Software, LLC

Legal CRM - Expenses Tutorial

The expenses tutorial will help familiarize you with the power of the Legal CRM expenses feature. Legal CRM expenses do it all and can handle soft costs due to the firm, hard costs due to third-party vendors, and provide special handling for settlement expenses. It is versatile and can handle any type of expenses.

Please review this video:

Index:

Adding a New Vendor and Vendor Settings

Legal CRM makes it easy to manage the vendors that your firm does business with. You may add a vendor at any time by going to “Vendors” in the left menu bar or by selecting “Add Vendor” from the “Vendor” dropdown from inside of an expense if you have admin or accounting user permissions. If you do not have admin or accounting user permissions, then you will not see the “Add Vendor” or “Edit” Vendor buttons when adding, editing or viewing an expense and will not be able to access the “Vendors” screen. Please note: if you require vendor approval then you will need to approve any new vendors before they may be used.

Adding a New Expense

The Legal CRM Expense and Costing feature does it all and can handle anything including adding in hard costs and vendors, soft costs due to your firm, or settlement expenses to be deducted from a settlement.

When adding your first expense you will need to decide what “Cost Type” to choose for the new expense.

Legal CRM supports these “Cost Types” for various scenarios with complete flexibility:

“Hard Cost – Third-Party Vendor” is an expense due to a third-party vendor that was paid as part of a case. Examples: experts, travel tickets, court filing fees, etc.
“Soft Cost – Due to Our Firm” is an expense that is due to your firm that you want to be reimbursed by the client, not a third-party vendor. Examples: mileage, photocopies, paper, firm administrative fees, etc.
“Settlement Costs” are usually for contingency cases and will normally include special damages, client debts or medical bills that the client is responsible to pay that may be deducted from a settlement by your law firm. Normally, your firm will enter these expenses at the time of settlement or ad hoc, depending on your firm protocols. Either way, settlement expenses are to be paid to a vendor on behalf of a client. These need special handling during a settlement. Special damages will not create vendor bills until a settlement reaches final approval or you invoice them manually.

These are the available cost types for settlement expenses in Legal CRM:

“Special Damage – Hold for Settlement” is an expense owed by the client such as a hospital bill
“Settlement Loan – Hold for Settlement” is a loan expense owed by the client to a finance company
“Other Client Debt – Hold for Settlement” is a client expense/debt such as an insurance payment or burial expenses, or anything else that you need to pay on behalf of a client that would not be a special damage or settlement loan.

Adding Hard Cost Expenses that are Due to a Third-Party Vendor

Hard costs, also known as case expenses are expenses that are due to a third-party vendor that paid as part of a case.

Examples: experts, travel tickets, court filing fees, etc.

Usually, most hard costs are billable to the case/client since they are incurred by the firm as part of a case. You decide if a hard cost will be client billable or not by using the client billable selector button to switch to “On” or “Off”

To add a “Hard Cost” you will go into a case, then press the “Expenses” tab button in the top menu bar, then press “Add Expense” in the top-right of the Expenses screen. Then, you will pick the “Cost Type” of “Hard Cost – Third-Party Vendor” Hard Costs require a Vendor to be selected since they are expenses that are paid to a third-party vendor.

Next, we will decide if there is a “Lien/Hold” or not for this expense. If there is a Lien or Hold, then set the “Lien/Hold” selector button to “On” or “Off” depending on your needs. If you add a Lien or Hold to an expense, then you need to select the “Lien/Hold Type” The “Lien/Hold Type” dropdown will not appear until you select “On” for the “Lien/Hold” selector.

Generally, Liens and Holds are used for Settlement Expenses and will be considered during a settlement, but they may be needed for hard costs, so we make them available in hard costs for your firm.

After deciding if there is a Lien/Hold or not, you will select the “Vendor” for the expense.

If you do not see the Vendor that this expense is related to, then the Vendor will need to be added. You may add a vendor at any time by going to “Setup” and then “Vendors” or by selecting the “Add Vendor” button when adding an expense if you have admin or accounting user permissions. If you do not have admin or accounting user permissions, then you will not see the “Add Vendor” or “Edit” Vendor buttons when adding, editing or viewing an expense.

The “Date Issued” will automatically insert the current date but it is editable if you are post-dating an expense that the firm has already incurred.

The “Invoice #” is the vendor invoice number and is an optional field.

The “Amount Billed” is the unit cost of the expense. This field is required.

“Qty” is the quantity of the expense. This is the number of units of the expense. This field is required but defaults to “1”

“Total” is the total of the expense and is a non-editable, calculated field. This is calculated as (Amount Billed * Qty)

“Category” is the billing category for this expense. Legal CRM comes preloaded with UTMBS and LEDES billing codes.

“Billable to Client?” is the button switch to determine if this expense is billable to the client or not. The default option is “On” for your convenience since most hard costs are billable back to the client or case. If you do not want to bill your client for this expense, then you would select “Off” for this option.

“Description” is the line item description for this expense. Feel free to add any information or details here. This field is visible in the expenses screen and in all expense reports.

“Document Upload” is an upload widget that will allow you to attach one or more receipts, vendor invoices, or other expense documentation that you may need to upload. Any expense document uploads will be viewable from the expense or from the Documents tab inside of a case.

Please note, if you select the Expense Category of “Medical Bills” then the system will display the “Service Type” and “Service Date From/To” fields. Generally, you will want to reserve this functionality for Settlement Expenses, but if you need to pay out this expense right away and are not waiting for a settlement, then you are welcome to add it as a Hard Cost expense at any time.

“Service Type” is the type of service that relates to the medical bill.

“Service Date From/To” are the dates of service and it is recommended that you add them if you know them

"Not Billed Yet" is the amount of the expense that has not been billed yet. Based on how the system was designed, the expenses do not become billed until they are invoiced or placed in a settlement and that settlement is approved. This is designed this way so that a firm can hold back certain expenses from a settlement but have an accurate tab of what they need to write off or which expenses are outstanding in the future. Some firms track unbilled expenses if clients have multiple settlements with them since they may have the opportunity to recover the unbilled expenses later from the client.

After you have made your selections in the “Add Expense” screen, you will press “Create Expense” to continue.

Adding Soft Cost Expenses that are Due to Your Firm

Soft costs, also known as reimbursable expenses are expenses that are due to your firm, not a third-party vendor.

Examples: mileage, photocopies, paper, firm administrative fees, etc.

Usually, most soft costs are billable to the case/client since they are incurred by the firm as part of a case. You decide if a soft cost will be client billable or not by using the client billable selector button to switch to “On” or “Off”

To add a “Soft Cost” you will go into a case, then press the “Expenses” tab button in the top menu bar, then press “Add Expense” in the top-right of the Expenses screen. Then, you will pick the “Cost Type” of “Soft Cost – Due to Our Firm” Soft Costs do not require a Vendor to be selected since they are expenses that are due to your firm. The Vendor dropdown will be invisible and not displayed if you are adding a “Soft Cost” expense.

Also, soft costs do not allow Liens/Holds so the “Liens/Holds” field will not be displayed.