Entering Client Payments & Costs in Abacus Accounting

Keeping track of client payments and costs can become a chore if you don't stay on top of it. Not to worry – join us for 15 minutes of tips and tricks for staying on top of your bottom line in Abacus Accounting!

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Video Transcript

Good morning, everyone. Good afternoon. Thank you for joining us today. If everyone could just please confirm that you can not only hear me, but you can also see our shared screen, go ahead and raise your hand or just give us a shout out on the chat panel. That would be really helpful. Let's see what we have here. All right. Hands raised. Michelle, Gwen, Jennifer, Jaclyn, Duncan, so many more. Thanks for coming and joining us today for our free training Friday. Again, good morning, good afternoon, wherever you're joining us from. My name is Andrew Perez, and I'm online content manager here at Abacus Next. I want to thank y'all for signing up for Entering Client Payments and Costs in Abacus Accounting.

Before we get started, just a couple quick housekeeping notes. Please feel free to submit your questions through the presentation using the chat panel. We'll try to answer your questions in the order that we receive them at the end of the presentation. We're going to run for about 15 or 20 minutes, and then we're going to tack on another 10 minutes or so of Q&A at the end. I'd like to introduce our speaker today, Perri Lafferty. Perri's our accounting specialist here at Abacus Next and will guide us through our training today, so without further ado, I'll hand it over to you, Perri.

Well, thank you, Andrew. Hello, everyone. It's Perri again. I'm here today to give you a little bit about entering client cost and another topic, entering client payments. We are actually starting here in the Abacus Accounting Program. Obviously our clients have been entered and passed on over to the billing side, the accounting side of our system, so what we're going to talk about today is how we actually come in here and I should say add costs to a client bill, you know, costs that you may have advanced for a client or perhaps soft costs that you're passing onto your clients. Then we're going to talk a little bit about entering the payments you receive from your clients. Let's go ahead here and get started.

I'm going use the menus across the top here, and I'm going to start over here under our billing drop down menu. From here, to enter costs that you do want to pass through to the clients, so that they appear on their client invoice, so that they reimburse you for these costs, we're going to use the costs and adjustments function. I'm going to open this one up, and you will be able to see that … Actually, I have one into here already that you can look at, but I'm going to show you how to actually enter them. This is a posting function, which means we're going to put it into this big box here, so we can actually review it one last time before we do post it, which is what sends it out over to the actual client billing, so it appears on their bill.

Now, before I get in too far, I want to give you two scenarios. One would be that you're using the Abacus billing side of the program. In other words, you're using the file menu, the matter menu, the billing menu, and perhaps even the trust menus. This is all about client billing. Well, if you're doing that, you're going to be entering all your costs here through costs and adjustment, not just soft costs, but all of your costs can come through here. But then, as you move along using more of your Abacus product, you might be using the accounting side, which means we may be writing checks through accounts payable and we're using the general ledger.

So, there really are two ways to do this. Obviously the first way is through our costs and adjustments, and everybody can use this for every cost, but I just want to mention that if you are actually using the program to write checks, you would actually use the check writer to get the cost onto your client's bill. In other words, you're writing the check to advance the cost, and at that same time you are posting it over to their bill. I'll start with the simple version, and then we'll move over to adding the writing a check for that actual cost itself.

So, over here I'm going to use the buttons on the side, and I'm going to come in and add. All right. So, first things first is the date. Obviously it defaults to today's date. You can change that if you wish, and there's a little calendar when you click on the arrow. Okay? Next is you choose the actual matter that you want to charge this to. When you open up with the arrow, once again, it takes you to another browse, and this is a list of your matters. We identify which matter we want to charge this to, and I'm going to make it nice and simple, and we're going to charge it to 123 Cedar Lake, so I will use them. It populates into the matter number, so I've got that listed here.

Now, it's all about what kind of cost is this? Once again, we do have a look up menu here, and you can always add to this menu. We'll talk about that a little bit, but Abacus does come pre-loaded with different types of client expense codes in here. Let's say, for example, I was going to charge for photocopies. I could just start typing in the word photocopy. It will narrow down my list to I actually have that choice. You double click on the choice, and it puts it into place. Next, of course, is if you want to, you can set up your cost per item, and then when you put in the number of items, Abacus just does the math for you, so we don't have to use all of our brain cells.

There we are, and we actually have a description in place as to what the code mentioned. It was four photocopies, but if I wanted to put in some more information here to make it a little clearer on the client bill, I could do so, of real estate documents maybe, something. Okay. And the good news is these three items across the bottom have already been defaulted as to exactly how they need to be set up. In other words, we are charging the client here. This is a new item. Un-billed equates to new in Abacus lingo, and this is not a write off, so these three indicators have already been chosen for us, and all we have to do is click on save, and that puts the entry right into our big box here, waiting to be posted.

Now, let's go back in here, and I want to show you a couple extra little things about this. I'm going to actually edit my work. All right? When I am looking up my code, you have the option to put in that cost per item if it makes sense, if it's something that could use that, so let me show you how that's done. I'm going to bring up the photocopy code again, and I'm simply going to edit it here. This is the list of my codes. I'm actually looking at the code itself. This is the place where I can actually put in my per item cost, if you have one. Now, not all your costs may need this. Right? If there's a filing fee, it's generally one filing fee at a time, so you don't have to fill this in, but if you'd like Abacus to calculate the dollar amount by accessing the code, you can set up the cost per item.

And for you folks out there that do tax based billing, I know sometimes people refer to it as leads billing, you have to have the appropriate tax based code set up with your cost as well, and this, again, is a look up, so that you can choose the appropriate tax based expense code to assign to your actual client expense code. If you're not doing tax based billing, you don't have to worry about this. It can remain blank.

Now, there is a difference between our hard costs and our soft costs, and the good, old IRS wants to be sure that we identify the cost appropriately. Hard costs are costs that you incur that you physically paid for at that time. In other words, if I have a filing fee, I'm going to write a check to the courthouse for my filing fee. If I have service of process, I'll write it to my process server, so I'm actually paying for it at the time. A soft cost is more like overhead, so something like photocopies or faxes, things that the firm does pay for, but not directly at the time of charging the client. Of course, photocopies are considered a soft cost.

Here we are, and let's get back out here to where we were, and we've got our items here waiting to be posted. If you have something in this bucket, as I call them, you can actually delete it. Let's say here was one that I put in by mistake. I can simply delete that here and no harm, no foul. Now I'm actually ready to post, so I can either select all and post or I could just click on my one item that I want to post and hit the post button. That now sends that cost over to the matter billing activity, so that it is ready to appear on the client bill. I'm just going to pop this open real quick, so you can see that what we said really does come true, and right down here, the bottom item, is that cost of photocopies that I just entered for this next bill that's going to my client.

So, all soft costs have to be done through costs and adjustments. That is the overall rule, but hard costs can be done through here as well, unless you're going to be writing a check, so let's quickly do that. I'm going to go to AP, open my very simple demand check writer, and I'm going to go get the clerk of court, and write a check for a filing fee. Okay. I put that in place. Remember, I'm writing a check now, so I'm getting two things done at once. I'm actually writing the check for my filing fee, and by coming down here and filling out the bottom area of my screen, I can charge it to any particular matter. We'll use the same guy. Okay. And the expense code for what's it for. This one is a filing fee, so once again, I'm brought back to my list, and there's my filing fee.

Now, when I go to print this, if you're physically not printing checks, you can say so, and it will just take care of all the accounting parts of writing a check in Abacus. Okay. You hit post, and that just also updated my matter billing activity, so that will appear on my client's bill. Whether you're doing it for hard costs or soft costs, writing checks or not writing checks, we have two ways of doing it, either through costs and adjustments or actually using a check writer, so that also will appear on the client's bill.

Now, I know we bit off a bit today to talk about, so I'm going to move over to payments, because obviously that's another big portion of using this program on a daily or weekly basis is entering our client payments, so that's actually done in a different section of the program, under billing. At least everything ties back to this menu. Right? Everything. We can edit our time. We can enter our cost. We can enter our payments. We can print our free bills and print and post our bills, so everything's under this one, wonderful menu here. I'm going to move down to payments received.

Now, this is also a posting function in the Abacus program, and this one does a lot for you. Cost and adjustments, of course, went out and updated our matters for billing. This not only updates the matter, but it updates your checkbook, it updates your bank reconciliation, and it updates your general ledger and of course your income statement, so there's a lot going on when payments are posted. Once again, we have our buttons on the right here to go through. Basically I'm going to click on ad, and first thing first is which matter is actually paying me? Remember, you have your clients, of course, but then the next level are their cases, their matters, so I'm going to go ahead and look this up, because this guy is paying for one matter. I'm going to find him here, and guess who that's going to be. Good, old Cedar Lake. Put that into place. It also pops in your client number, so you do not have to look that up.

Now, if your clients are sending you in their money, right, that you have earned, and they actually put the invoice number down there on their checks perhaps, if you have that invoice number, you could just enter it right now in the invoice number box, and that basically goes ahead and it's thinking, "Okay. Did they pay the full amount of that invoice?" It will do the break out for you, because it knows exactly what's on that invoice, and Abacus also knows who did the work on that invoices. If we have an invoice number here, that would be great to go ahead and pop into place, but sometimes they may not include their invoice number and you're really not sure, so when you put in their client matter number, it will come up and show you everything that is owed. All right?

For this one I kept it nice and simple. We have two choices. We can either apply the payment as on account, meaning we don't want to apply it to any specific invoice. We just want to record the fact they paid their bill, so we would choose this option. Okay? Or if we do want to apply it to the invoice, we didn't know the invoice number until we got this in, and now we can see what it is, you can just highlight it here, and it will put it into place. By choosing the invoice number, Abacus could go back in its little brain and see exactly who worked on that matter on that invoice and appropriately distribute the fee amongst the time keepers. If we are not applying it to any specific invoice … You know, some firms don't need to get down to that Nth degree. They're just putting in the payment as they come in. … you can just apply it on account, and in that choice Abacus will apply it to the responsible time keeper for this matter.

Let me go ahead in here and fill this is. I'm going to say he was a good guy, paid the whole thing. Okay. I'm actually am going to use this invoice number, so I can show you what it does. This here is letting me know that this is going into my operating account, and if any of you have ever had training with me, you know that's a big deal. We want to make sure that is the operating account. We would never ever put our trust account in there, because trust has its own little menu and all the things that go with trust, and this is not trust money, so we definitely don't want to get our funds mixed up.

Here we are. I have my matter, my amount, which invoice it's paying, and now I'm going to actually put in the check number that they paid with, or I could back that out and put in any other way of payment that they made, pay by credit card, pay by wire transfer, whatever they may have done. Now, I'm going to come to the breakout tab. Well, since I told it which invoice to look at, Abacus went and looked in that invoice and saw that there were $250 charged in hard costs, $65 in soft costs, and then 1,475 was the fee on that bill. By entering my invoice, by choosing my invoice that I want to apply the payment against, it automatically knows how to distribute the payment for me, and it can come over here and distribute it out to the people who actually worked on the case, so it knows exactly who worked on it, at what rate, if it's hourly case, and this payment is on full, so it knows this is all of the fees by this one time keeper and then fees by a secondary time keeper, and it parses it out. All right?

Now, a couple of other things here. If this payment was only a partial payment, say they only paid $1,000 … All right. Let me go in here and just do that, so you can see how that works. Let me get rid of this one, and let's do this again. Come up here. I've got this number finally memorized, so I don't take the time to look it up right now. Let's say just say it's $1,000 on this invoice, and here we are. Of course, I put in how it was paid, because we always want to track that.

When it comes to the break out, Abacus is going to assume, and we have to know this, because you are still in charge here, you can change what Abacus puts in place, but the way it works is Abacus will first pay off all the hard costs. Then it will pay off what soft costs it can from the dollar amount provided, and then the remaining balance will go to fees. Obviously all the fees were not paid, so when we get to the fee distribution tab, it's proportionately distributed amongst the time keepers, and the program retains in its little brain that that invoice was partially paid and how much is left to delegate to the time keepers on the next payment. Whether it's a full payment or a partial payment, if we use the invoice number to apply it, it knows how to distribute it amongst the time keepers. Okay? All right.

From here, of course, we're going to post it. When we do go to post, we should get this little message. This is my favorite reminder in Abacus, because even I can't remember to look at my deposit date. Of course, as I mentioned, this updates the matter billing, so the client sees that you got their money, but also it's updating your checkbook, your operating checkbook in Abacus, so it wants to make sure that we have the appropriate deposit date, which is right up here in the corner, because if you've ever done a bank reconciliation, you know if we don't have the right dates, sometimes that can really get us all tied up there. We have a chance now to change this deposit date. If this didn't go in the bank today, if it went in the bank last week, I could say, "Oh. No. No. No. I don't want to post it on the 14th. Let's go back and post it on the 7th." You have the opportunity to change that date. This is the last thing you adjust before you hit the posting button.

Now, just two other things here. If you wanted to print a deposit ticket, you could. If you had multiple matters paying, obviously you would enter them and then print your deposit slip. Unfortunately, that's a print only function. I can't really show you what it looks like, but it kind of looks like a deposit ticket that you take to the bank. Or if the client's standing in front of you and would like a receipt, you can simply highlight the actual payment, click on print receipt, and you actually get what the receipt looks like here up on the screen, and we'd print it, of course, with our little printer icon. We want to do those functions before we post it, because once it comes out of the bucket with posting, we can't put it back in. So, here we are, and we then, if I click on it, can post. Once again, it's asking me about that date. This time I got it right, so I'm going to go ahead and say yes. Okay.

In 10 minutes that has taken care of how we enter client costs, whether they be soft or hard costs, whether we want to enter them through cost and adjustments or physically write a check for them, or just enter the check through Abacus, and also how to come in and actually enter our payments, so that all the appropriate parts of Abacus are updated. One thing I failed to mention is when you do post payments, that does update both your accounts receivable report and your productivity report, so as you can see, posting in Abacus can get a lot of things taken care of at once. Okay? Andrew, I think we're going to push it back to you to see if we have any questions.

Fantastic. Thanks for that, Perri. Yeah. We do have some questions already. This first one's from [Desiree 00:21:05] [Rivera 00:21:05]. She asks, "How do you change a cost per item, for example, stamps, when the costs go up?"

Excellent. Excellent. Okay. Of course, I accessed our cost codes through costs and adjustments, but there is a spot under the setup where they actually just are sitting right there waiting for you, so under file, under setup we come down to client expense codes, and this is where the little database is for our codes. If we wanted to go into postage, we can start identifying here by typing it in, and we click on the edit button to edit it. Look at mine. Mine's really old. Thanks for bringing that up, Desiree. I think I might want to update this a little bit. Okay. I'm not sure how much it is. I'm going to say 49 cents. Again, that is a soft cost, unless we're actually writing a check for postage for that one matter. Then it would be a hard cost, but typically they're soft costs, because we're just passing on the postage on the day to day basis. Of course, you always hit done when you've changed something, so that it saves it. Okay?

All right. Our next one is, "How do I delete a cost from a matter once it has been posted? Perhaps it is incorrect or entered twice." This one's from [Patricia 00:22:29].

Excellent. Good deal. We will access the matter billing, because I'm going to assume and I just want to explain that the cost has been posted. I think you mentioned that. We have put it in here, and we have clicked on the posting bucket, so that the cost came out of the bucket and went over actually to the matter billing activity. We open it up. We put in the appropriate matter number, and if it is an item that you have just recently posted and it still has the status of un-billed, you can simply highlight it and hit the delete button. It lets you know where it was entered. It was entered through client adjustments or costs and adjustments, and it's letting you know that it's going to take it out of this record, which is exactly what we want it to do, so that's a good thing, if it's a write off, what it will do with that, and are we sure that we want to continue? The answer's yes. And boom. It's simply taken it off of this matter, never to be billed, because we have deleted it from the matter billing detail. Good question.

All right. This one's a little lengthy, but we can try to work our way through it. This one's from [Linda 00:23:50]. It says, "If you have a previous invoice that has been billed, but you are receiving a payment on a later invoice, how do you record the payment without it applying to the past due amount from a previous invoice? We ran into a problem with trying to get the past due amount not to be paid first."

Okay. Abacus typically will try to apply the payment to the prior balance. Okay? It's its mindset. It's the way it was build, but you are in charge. When you're entering your client payment … And I don't have a previous balance on this one, but say I did. I'm entering my payment, and I didn't like the way that Abacus was distributing it. Okay. So, let's say it's here. If there was a prior balance on here, when I come down here … I've got to fill something in here. It won't let me go without. When I get here, it's you now might have a prior balance section here, where it's trying to apply it against that prior balance. If you don't want it to, you want to make sure, first of all, that you're on the most recent version of Abacus, and I'm actually one letter behind. We are currently at 23.22.24G, so you want to make sure you have the appropriate version of your Abacus Accounting running, because we do make little enhancements as time goes along, and this is probably relating to this new enhancement.

So, you may have a prior balance in here. You can take the amount out of the prior balance and then apply it to whatever you want it to. Let's say it was, you know, something you wanted to apply to hard cost and soft costs and not pay their prior balance. You manually need to change that. Abacus down the road will be adding more enhancements to the program to have you just say upfront, "I never want to apply payments to prior balances," and it won't do it, but for right now it's up to you to make the choice as to whether it's going to pay the prior balance … That is in this invisible field I'm circling. … or, you know, if you don't want it to pay that, just then take it out and move the payments down into where you do want them to go. Okay? That's a more advanced question there, because that does deal with a new feature that Abacus is coming out with, or has come out with and we're even going to enhance it more.

Great. This next one's from [Penny 00:26:21]. She asks, "Is there an option for the receipt to show if there is a balance due?"

For the receipt to show if there is a balance due. Okay. Look at here. Let me get out of there. I do not believe that we have anything like that, but I want to make sure I understand. Penny, are you asking that when you enter a payment when you're in here, that there's a way to look at the receipt? If that's the question, we don't currently have that capability of pulling up a receipt for this money. It simply will show you … Let's see if I can make this happen here.

Penny just said, "Once you post a payment and you print the receipt, it usually only shows the amount you just posted."

Yeah. The receipt's kind of like a one time thing. When the item is in the posting bucket waiting, when the payment's in the posting bucket, you have access to print that receipt. That is kind of like right now that payment is waiting, and that is the receipt that is going to be shown. It does not have the ability to go back and look at the matter billing and see what other payments have been made. When it's sitting in the bucket here, this is the time you have to print this receipt. While it's in here, we print it. Once it's been pulled out of the bucket, we no longer can get to the receipt.

All right. Great. Let's see. This one's from [Jaclyn 00:28:00]. "How do you post payments to multiple matters, like when you receive payment from a bankruptcy trustee?"

Okay. Well, as long as you have all of the data in the system, in other words, you've done your bills for all of those matters, you've processed them, they've been posted, when you come in here, you have the choice of all matters. Okay? So, if you do have a client that does have multiple matters, you can come in and leave it on all matter and simply go get the … I'm trying to remember who I have in here that has more than one matter. I think the [Addisons 00:28:37] do. You can get the client, and then it will show you the different matter numbers that have payments owed to them. Okay? This particular client has multiple matters with my [Simon 00:28:53] and [Barnes 00:28:54] Firm, so when I enter their client and leave it on all matters, it will bring that up. Then you just appropriate how you want to split that out, you know, which matters you wanted to pay for. So you do have the option to pay by a client, instead of by matter, but I was just going from the single, solitary matter payment, and then you can up it to include all matters for a client. Good question.

All right. Thank you, Perri. Let's see if we can sneak in one or two more before we wrap up. Let's see. This one's from Linda. "If a fee or cost has been build, but a client objects to it and you need to delete the costs or part of the fee, how do you do that once it's billed?

Okay. Here we go. That's the other side of things. We brought up here where that if the item had not been billed yet, in other words, we caught it before the bill had been printed and posted and it is un-billed, that's easy. We just highlight it and delete it. If it has a billed status, well then we've got to think about it, because, well, like the example I was just given, the client is not going to pay it, so how do I take care of that? Well, normally that would be you would come into your costs and adjustments and do a write off of sorts to back it off of their ledger, because you cannot delete a billed item.

The reasoning behind that … Okay. Let me try. Like if I wanted to delete this, it should tell me I can't, because it has been billed. The reason why we do that is because the client's received a bill, and they know their balance. Then if we do something to take something off of their ledger and we print them a new bill next month, their prior balance is not going to match what they had on their previous bill, so Abacus makes you think about it a little bit and then use cost and adjustments to come in and enter here. Either you can give a credit for the actual cost itself, like say photocopies. If I get my matter number in there first, it would help. Okay. But if I wanted to credit just say photocopies, because I'm just backing out photocopies, I can do so, whatever the dollar amount is.

But of course you want to make sure you change this to a credit instead of a debit. Then you leave it on an un-billed status, so it will show on the next bill you print, so the client can see that you now have deducted $12 for photocopies off their bill, because it's marked as a credit. We save this, and of course, we post it. In the description though I probably would put something like, "Photocopies credit for previous bill," or something like that, so they really understand that you're giving them a credit for it. But the big deal is to make sure that you mark it as a credit instead of a debit. Okay?

All right. I think that's going to be our last question for today, everyone. Before we all take off and enjoy our rest of our day and our weekend, I just want to let you all know about next week's webinar. I think it's a perfect segue into what Perri just went over, since we just went over payments and costs in Abacus Accounting. Next week's webinars about Abacus Payment Exchange, our new APX program that allows you to accept debit and credit card payments from within the Abacus Law software itself and also to be included in Abacus Accounting coming soon.

So I'm going to be dropping a link to all of y'all right now, and you can just follow it and either learn more about APX on the page, and then I'll also be just dropping another link directly to the webinar sign up page itself, if any of y'all are interested in attending next week's webinar about accepting credit card payments within almost 24 hours of acceptance. Here's two links for you all. Feel free to sign up. Hopefully we see you next week. Thanks, Perri, for everything that you went over today. Be on a look out for a thank you email with today's recorded presentation and a transcript. Thanks, everyone, for coming, and enjoy the rest of your Friday, and have a great weekend.

Thank you, Andrew.

You're welcome. Bye, guys.

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