Entering Disbursements

In this article:

• Overview
• Recording a Disbursement 
• Viewing Recorded Disbursements
• Understanding Sales Tax and Soft Disbursements

Overview

In legal billing, disbursements refer to out-of-pocket expenses that a law firm incurs on behalf of a client and then passes on to the client for reimbursement. These expenses are separate from legal fees (such as hourly rates or fixed fees) and are typically necessary for handling a case or providing legal services. Some common types of disbursements include court fees, copying/printing costs, travel expenses, and postage/courier costs—just to name a few.

There are two types of disbursements:

• Hard disbursements are expenses incurred on the client's behalf that require direct payment by the firm to a vendor. For example, court filing fees and application lodgment fees would be considered a hard cost. You would be expected to have an invoice for the exact cost of this expense that can be presented to a customer on request. 
• Soft disbursements are expenses that are not directly paid to the vendor but are charged to the client. Soft costs are items such as faxes, photocopies, or telephone calls. You would not be able to produce an invoice for this expense as it would be an estimate. 

Recording a Disbursement 

You can record costs directly in Actionstep as disbursements (rather than recording them through firm withdrawals or supplier invoices). 

To create and record a disbursement:

1. In Actionstep, do one of the following to view the New Disbursement window:
   • Click the global Create button and choose Disbursement from the Timesheet section.
   • Click Timesheet in the main menu, choose Today, and then click Create Disbursement. 
   • Click Timesheet in the main menu, choose Disbursements > Disbursement List, and then click Create Disbursement.
   • View the matter you want to record a disbursement for, click the Billing menu icon, and view the invoice / bill. Then click the Disbursements tab and click Create disbursement.
     
2. At the New Disbursement window, provide the following information:
   NOTE:  You can enter the details of the disbursement manually or you can use the Template drop-down list to use options that have been pre-configured and saved.
   • Date: Enter the date of the disbursement. 
   • Timekeeper: Choose the timekeeper who recorded the disbursement.
   • Matter: If the matter isn't already specified, choose the matter the disbursement is associated with.
   • Description: Enter a description of the disbursement. 
   • Quantity: Enter the number of disbursements.
   • Unit of measure: Choose Each or Hourly.
   • Unit price: Enter the price of the disbursement per unit.
   • Income account: Choose the account associated with the disbursement. (If you don't specify a different Income account, the system default will be used. (The system default is determined in Billing Settings)).
   • Tax code: Enter the applicable tax and select Incl. to include the tax rate in the total calculation of the owed amount.
3. Click Save to save your changes and record the disbursement.
   TIP:  To create another disbursement, select Create another before clicking Save.  

Viewing Recorded Disbursements

Once a disbursement has been recorded, you can view it on the matter's Billing page. 

To do this:

1. View the matter.
2. Click the Billing menu icon The Billing page appears.
3. Click the Disbursements link on the left side of the page. A list of disbursements is displayed.
   Recorded disbursements are added to the total invoice amount, which you can generate by clicking the Invoice now button:
    

You can also view all your disbursements in one custom list view by going to Timesheet > Disbursements > Disbursement List. 

Understanding Sales Tax and Soft Disbursements

If sales tax is hardcoded to a soft disbursement, the tax applied to the disbursement will be exactly that. Even if the matter does not have sales tax enabled in Matter Billing Options, the disbursement will still have sales tax and it cannot be overwritten.

However, if the sales tax on a soft disbursement is not hardcoded (i.e., it is set to default), then it will inherit the tax status that has been set for the matter in the matter billing settings. If you change the tax status in the matter billing options, then this will change the tax code allocated to the disbursement.

Related Articles:

• Disbursement Templates
• Separating Office Disbursements and Office Expenses on Invoices