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This topic covers assigning court or legal costs to a Debtor or Client.
Requirements
- Experience using and setting up Transaction Types
Overview
Court and other costs can be assigned to a Debtor or to a Client.
This can be done by posting transactions to the Debtor's account.
Legal Cost Transaction Types
First, it is necessary to create Transaction Types to handle your
legal fees. For this, please use the 200 series in the Transaction
Type categories, since types 200 to 299 are set aside for Legal Costs.
For example:
Code 205 - Serve Papers - Account Type: Fee
Code 210 - Docet Cost - Account Type: Fee
Any legal cost that is posted as a transaction in the 200
series is automatically tallied by Collect!
When you click in the Principal field on the Debtor form, you can
view the Total Legal Costs in the Principal Detail form.
Posting A Legal Transaction
After you have created your transaction types, you can use them
to assign fees to debtors or clients.
To try this out, go to the Debtor form and click the Finance button.
Create a new Transaction of type 205, assuming you created a 205
transaction type.
ADD FEE TO DEBTOR
To add the fee to the Debtor, enter it as a negative ( minus ) amount
in the 'To Us' field. This will add the amount to the Debtor's Owing.
BILL FEE TO CLIENT
To pre-bill the Client this fee and NOT add it to the Debtor, enter the
cost as a positive amount in the 'Commission Amount' field.
When you generate the statement, Collect! will bill the amount to the
Client and not affect the Debtor's Owing.
ADVANCED BILLING TECHNIQUES
The procedures described so far are very straightforward. However,
scenarios of fees, charges and billing can be complicated and
diverse. The following is an example of a slightly more complex
assignment of costs. It will demonstrate the flexibility of Collect!
for posting different types of transactions and payments.
Let's say that you want to charge legal fees to a Debtor. Since you
have paid the costs yourself, you don't want to wait to be reimbursed.
You want to bill your Client now and reimburse them when the Debtor
settles the debt.
1. To add the amount to the Debtor's Owing, post a transaction of a
legal type as described above. Enter the amount in the 'To Us' field
as a negative ( minus ) amount. This will increase the total that the
Debtor owes.
2. In the Client Payment form, enter a new client payment that is a
negative ( minus ) amount, equal to the amount entered in the Debtor form.
In the Description field, enter a note to explain that this charge is "Billing for
court costs for Debtor #, etc."
When the Client's statement is generated, the amount will be
calculated and billed. A note will be included to explain the charge.
3. When the Debtor settles the debt, post a transaction that is a
Payment type. In the Description, enter "Payment toward court costs".
4. In the Client Payment form, enter a new client payment that is a positive
amount.
In the Description field, enter a note to explain that this is "Credit for court
costs for Debtor #, etc."
When the Client's statement is generated, the amount will be
calculated and credited. A note will be included to explain the
reimbursement.
Legal Fees Breakdown
In the Principal Detail form, Total Legal Costs amount is displayed. If this
is a combination of fees that are owing to the agency and fees for which the
client must be reimbursed, you can do a breakdown of Legal Fees.
When you setup your transaction types for court costs and
payments, be sure to refer to help documentation. In particular, the 'Omit
from Client Statement' switch can be used to flag charges that do not
involve the client.
If a breakdown of legal fees is needed:
1. When you are on the Debtor's form, press the Finance button to display all
transactions for this Debtor.
2. Press F6 to bring up the Edit Search Criteria form. To refer to help available
for designing search criteria, press F1.
3. Do a search for all legal fee transactions that DO NOT have the 'Omit from
Client Statement' switch set. This will tell you the portion of fees that were
charged to the client. Descriptions that were entered when the transactions
were posted can give you details. Also, the Client Payments can be checked
to confirm your calculations.
See Also
- How To Setup Transaction Types
- How To Post A Transaction
- Legal Topics
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