Separate Office Disbursements and Office Expenses on Invoices

In this article, you will learn how to separate office disbursements and office expenses on invoices to meet New Zealand Law Society regulations.

The New Zealand Law Society promotes open and transparent billing and they do not condone describing an office service fee or an expense recovery, which is not an actual cost to the practice as a disbursement. Any actual disbursement, such as an identifiable courier charge may be listed as a disbursement (see below).

This means that any administrative charges or additional fees, for example, administration fees in relation to running a property search as opposed to the cost of the search itself or administrative fees (eg 3%) charged on a file are NOT classed as disbursements and cannot be invoiced as such.

In Actionstep you have two choices, you can include these administrative fees as time and have them appear as a line item in your time entries at a fixed fee OR you can still input them into Actionstep as disbursements so that they are not coded in the general ledger to disbursements and they do not appear as disbursements on the invoice.

• To do this first you must create a separate "income" general ledger account to which these "expenses" will be allocated.  For this example, we will create a general ledger account under income called "4-1300 - Office Expenses"

• You will need to make a note of the GL account number that you are allocating these expenses to as you will need to remove these from your disbursements on the invoice and make sure they are under a new heading called Office Expenses.
• Click on the sample invoice below and under the heading office expenses you will notice this conditional merge field: *IF {SPI_Account|rn=*|ifnull=ignore} == "4-1300"
• This means that under the heading "Office Expenses" we only want to show line items that have been coded to the general ledger account 4-1300, so if you create a disbursement for an administration charge like below:

• The above is a 3% admin charge on a fixed fee of $1,000 matter. As you can see the administration charge has been added as a disbursement but is being allocated to the 4-1300 Office Expense general ledger.
• This means that it will appear under the Office Expenses heading in your invoice template (not the disbursements heading) and now meets the New Zealand Law Society Regulations.
• When you look at the conditional merge fields under the disbursement heading, you should see that you want all the line items under "4-1300" (as these are shown under the office expenses heading) to be deleted and anything else under the fees heading  "4-1100", as these are shown under fees. You only want the disbursements that have been coded to "4-1200" to show.
• The invoice template (below) will work if your general ledger is set up like this:                    

• However, if it is not you need to change the invoice template to the correct general ledger account codes so that it will work correctly.

TIP: If you are having difficulty understanding this and would like some assistance, then please contact your certified Consulting Partner as they can help you with the invoice template and your billing process. If you do not have one, you can find one here: Actionstep Partners