Managing Billing Lifecycle with Abacus Accounting – Free Training Fridays
In Abacus Accounting, the billing life cycle covers important topics including entering time to be billed, to depositing money into a trust account, to finally maintaining unpaid bills. Essentially, it is the one-stop-shop for managing your firm's financial success.Learn Abacus Accounting's 12-step billing life cycle process.From entering your time to getting paid and everything in between, this webinar will teach you how to use Abacus Accounting to streamline the billing process so you get paid faster.
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Hi everyone, and welcome to Abacus free training Friday webinar. Today, we're going to talk about the Abacus Law billing life cycle. The billing life cycle is truly the lifeblood of your firm. It's how you manage finances and ensure that your firm's work is compensated accurately and in a timely manner. To maximize the efficiencies in Abacus Law integrated time, billing, and accounting features, it is key that you understand the accounting and billing lifecycle. That process starts with accurate tracking of time, activities, information, and expenses. It then moves to the invoicing. Kind of the pre-bill, actual bill, posting of bills. Then of course managing your trust accounts as well, and then it moves into the managing of payments. How you receive payments, how those are processed, and keeping your books accurate and up to date.
Based on feedback from Abacus clients over the years, we've found that accurate billing as close to the moment the activity was performed is the single best way to prevent undercharging or overcharging your client. Billing for email is something that I'll call out as a specific advantage because we all know that the volume of emails read, written, analyzed, archived has increased exponentially. There's just a flood of emails these days, so spending time in your inbox each morning can be a productive process when you're using Abacus Law and its Outlook add-in, to not only track and archive and link incoming and outgoing emails to the appropriate case file, but they're also tracking your time and taking advantage of a one click billing feature for your email, so that's something that a lot of clients of have reported the ability or the benefit from tracking that information as part of the billing life cycle.
Finally, something I did want to touch on is that Abacus offers billing and balance services as well as the Abacus payment exchange, which is our brand new electronic payment processing service. Those features could actually help you automate the production of outgoing bills. It could certainly expedite payments, incoming revenue and moneys, and it’s even a service that can help review, update, and control your books. Right? The firm's financials on a going forward basis. Don't hesitate to contact us to get more information about these valuable services.
The first thing we'll touch on when we're thinking of the billing life cycle is exactly how you enter your time, how you track it, and what access you have to that information. At the very beginning of that billing lifecycle on the case file or on the client record or even in the calendar in Abacus Law, you have a quick access to this bill button. Whether it's a note that you enter or that you add some additional information to, clicking that bill button will convert that note to a time ticket. Of course, Abacus has this handy dollar sign column alongside many different types of records within the program.
The billing lifecycle starts with either the activity that you're performing that you're then tracking the time for in billing or simply a case that maybe has a flat fee or a contingency. Those are kind of the beginning aspects of that billing lifecycle where for a note or an event in the program, a calendar activity, a task, a meeting, whatever it may be, there's that bill button for you as well as documents and as I touched on earlier, email. There's that bill button and of course the dollar sign. That visual reference of which activities have been billed in Abacus. I think maybe that perhaps the easiest quickest way to capture time and bill for it is with a note. I have mine set so that the note timer begins automatically. I can type out a description of what I'm doing. I can pause it. I can actually have multiple kind of notes open at the same time to capture different information. I can move from one to the other, and there's that ubiquitous bill button.
Really what that does is it gives me the ability to track my time and activity, and when I click bill, I can then generate a time ticket and that is really the beginning of the true billing component where a time entry or bit of information that's captured and sorted with the case file, when I click bill, I then create a time ticket. The Abacus note system knows the client, it knows the case. Certainly the date, you know, is stamped on there. It knows who I am as a timekeeper based on my credentials as I'm logged into the system. I can enter the duration. It'll calculate based on my rate the ticket value and I can enter a description. Some information that's helpful and would appear as the line item description for a fee, let's say, in an invoice that I generate for the client.
Those time tickets, that's really the beginning of your billing lifecycle, is the ability to not only track activity and productivity, but also then click bill for the many different types of billing activities that are nicely tracked for you in Abacus. Before we leave the case management aspects of the program, I wanted to point out the ability to view your time tickets. Either your own or for a case or for many cases as well as the ability to view time tickets for others. You know, who is doing what within the firm for any given time period that's available to you. Also on a matter record with the accounting program, you have the ability to generate a bill for this matter as a one off, and also you have an accounting dropdown. The summary, the ability to browse time tickets for this case file, tracking accounting details, billing activity, or trust activity.
This is direct information as part of the billing lifecycle as you're capturing the information on a case by case or client by client basis, you also have visibility into aggregate totals and time periods, date ranges and whatnot of accounting information that's specific to this case. Okay, so with that said, that is how you begin the lifecycle. You create, you perform the work, you bill for it. That information is tracked for you, and it's managed on a case by case basis in the accounting feature set for Abacus Law.
I did want to touch on the kind of billing process, the invoicing. Right? It's usually a three step process where you've entered your time, you've configured all the cases. Of course there's a "bill-to", somebody's who's going to receive the invoice, but in Abacus, the three step process for the actual generation of invoices, the creation of an invoice that you then send to a client based on that client's preferences. Whether it's via email as a file attachment, whether it's a printed statement, kind of a traditional way of presenting that information, or even creating a leads output, which is a data file, a standardized data file, which is a nice way to maybe actually present invoice information but in electronic format that then can be uploaded into your client's internal billing and tracking system.
Let's talk about the actual invoice process. The first step is, and I'm clicking on pre-bills here in the tool bar. The pre-bill process is just that. You're creating an internal draft version of the current statement. Now, the pre-bill process in Abacus helps you or gives you tools, let's say, to create a billing run, right? It's a batch process. Create a billing run by timekeeper or billing frequency, billing mode type of case. Whatever the criteria that you want to use to kind of filter or select the cases that will be part of your pre-bill run, you can have these controls in Abacus and very quickly click this button and Abacus will identify all those matching cases and present to you pre-bills.
I'm actually going to jump over to an example of a pre-bill. The pre-bill is just that. This is not a format that will ever be viewed by the client. Instead, it's a document that is for internal purposes, and really the goal of the pre-bill is to present to you the current fees and costs and other items that are for whatever time period you're tracking are the current billables for this case. Right? I can view by ticket number, I can make changes. One of the things I like is you can certainly print pre-bills and have somebody kind of mark them up by hand. You can distribute them as PDF files that also can kind of be marked up, but also Abacus has a feature built in where as part of the invoicing, the pre-bill process, you can literally review information for fees and costs and make changes directly to the time tickets using the kind of electronic version of the pre-bill as a consolidated way to have quick access to that information.
The first step is to generate your pre-bills. Right? For all the matching cases, and then have individuals who were responsible, let's say, for the fees or for entering the costs, they're just kind of managing that case because they've worked on it. This is where that review process happens. You go through the pre-bills. You make sure they're accurate. You make any changes. You reflect those changes in the Abacus program. The next step of the billing life cycle is to create your actual bills. We reviewed our pre-bills, we've made changes as needed, and now using a very similar process, I'm clicking actual bills up here in the toolbar, I can using the same criteria kind of selection tools to identify which cases will be part of the actual bill billing run.
This is where you can send the final statement to the printer and send it off in the mail that day or Abacus can automatically. I've worked with clients who have 300 bills sent via email as part of their actual bill process, the generation of actual bills in that lifecycle. There are a number of different ways you can do it, but you get very familiar with the ability to add all matching records to the billing run, and then I'm going to jump over here and show you an example of an actual invoice. Here is a specific invoice format that I've selected. It has my firm name. Bear with me, it's a hypothetical firm that I'm using here for demonstration purposes. Same with the client, the invoice number. You know, it's a professional, standardized, and clean format. We can include a logo up top.
In fact, there are a number of different billing format codes that can be selected. Those billing format codes can also control what information and how that information is presented into your invoices. The real goal is to have a consistent and comprehensive way of sharing that information with your clients, and in Abacus, the actual bill process is how you generate invoices and deliver them in an accurate way and an efficient way to the clients in the format that they prefer. That's the billing lifecycle for the invoicing component of it. We've generated pre-bills, made changes, reviewed them as needed. We've created our actual bills, right? Those are the instruments, the files or the printouts that we send and share with our clients.
Then the final step of that process is to post your bills. Right? If it's a three step process, I'm clicking billing up here. I start with my pre-bills. I then generate my actual bills, and then I post my bills. Once I've posted my bills, the actual invoicing process for that time period is complete because moneys that are now due are now tracked in the system as a receivable, right? If you're doing productivity reports or you're doing your AR reports to track moneys that are coming in, that is exactly the process that you would use to manage, at least the invoicing component or phase of the billing lifecycle.
Pre-bills, actual bills, and then you post your bills, right? Then they start being tracked for AR purposes, and as payments come in of course you're applying those payments directly against invoices that you've sent out and are being tracked in your system. Okay? I did want to touch on trust accounting because this is an important component of the Abacus accounting feature set. Abacus Law Accounting was designed from the ground up of law firms, and that's why the actual trust accounting is such a powerful feature set within it.
In your chart of accounts, you can have one trust account or multiple trust accounts. There's a lot of flexibility in that with the goal ease of use being you can enter deposits, right? If I'm entering the deposit, I can click add here. I select the case, I select the trust account. If there's one, it'll default to my default trust account, but I could actually have the ability to accept credit cards and have a PCI compliant secure way of having a third party process those credit card payments, but it's a very good way for you, whether it's retainer amount or a payment of an invoice that you've sent out using that Abacus payment exchange service, it's with the flat 3% fee, and it's your ability to offer that to your clients. Working with a lot of clients like I do, it's become something that a lot of your clients opt into because it's an efficient way and a secure way to pay an invoice for legal services very quickly.
Also working with a lot of firms that let's say do high volume practice or have flat fees or something like that, being able to kind of keep your revenues or accept moneys very quickly and easily via electronic payments is a nice way to kind of add flexibility and gain some efficiencies for managing that billing life cycle. Going back here, so the trust deposit I select the manner that these moneys will apply to. I select the trust account, the amount, I can enter a description, and I click done. The trust deposits are just like that. It's a nice way to be able to kind of enter that money, track it, flag it, and have it organized both in reports for a transaction history or for an individual trust account or for trust activities that pertain to a specific client or case. All right?
Those trust deposits are a nice way for you to enter that information and of course post that so the moneys then become tracked and added to your trust accounts. Then of course you can print a receipt or a deposit slip as needed. Okay, so that's the first step of getting moneys into your trust accounts. The next step is being able to print checks from those accounts, right? If I'm in trust, I can actually have a demand check writer where I'm selecting an individual payment or check to be created, or I can enter multiple check requests and then process them in a sequence where those checks are then maybe sent to the printer in a nice efficient way.
Another way that this can be very helpful is in Abacus you can actually automate the trust check requests once you've posted each bill that has a trust transfer. If you have, let's say we've received moneys and you've entered them into a trust account and then during a billing period, you create an invoice that's billing against the moneys in trust. The actual trust check request that you, and that's what you billed for, work performed for a case against moneys that are in trusts, that trust check request can be automated, right?
However, the actual check processing is something that you must do within the program. The trust check request can be automated. You have a nice list of them, and then being able to process them quickly and efficiently is something that you can do. You know, the advantage there is you have that last check and balance to make sure that everything's accurate and everything is kind of going, everything's flowing from the right account to the right recipient account as well.
I do want to point out that when you are printing checks in your trust account, the way that the funds are applied, and this is consistent actually in more than one aspect of the Abacus program, but the way moneys incoming are applied are first to the prior balance with the oldest first being how moneys are applied and then to hard costs that you're paying to a vendor, soft costs, taxes, fees, and then finally late charges. Just to give you a sense of how incoming moneys are applied, whether it's a trust check or it's coming in through another kind of payment. Either electronic payment through APX, Abacus Payment Exchange, or a check that you may receive, funds that you may receive from your client.
That's the next step is the ability to get your invoices out. In the billing lifecycle, you can then either add moneys to trust accounts and then write checks. In other words, get money from your trust accounts with the ability to reconcile one or more of your trust bank accounts and of course have a full suite of reports that you could run at any time to see transaction histories and activities and balances and things like that from your trust accounts.
Then the next step is payments. As payments come in, I'm clicking the payments button here in the toolbar. If we recap our lifecycle so far, we've captured our time and billed against clients and against cases that the work applied to. That's tracked and managed for us. Then we've gone through the billing, the pre-bill, actual bill, and posting of bills process. Now, we're receiving payments. I click payments up here in the toolbar, and I have my enter client payments dialogue. This is where I can select a client to see all invoices outstanding for maybe more than one case that I'm working on or I'm handling for the client, or I can select a case, a matter, in order to see just the invoices for that case.
I enter the amount of the payment, I can select from a list of invoices that are outstanding, let's say, for a case. I can apply those moneys against them. I select the amount coming in, the invoice number that that applies to, I can select it here, and I can also at this point select or enable charge a credit card for the payment. As I'm entering payments, as I'm receiving those funds from my clients, I'm able to enter them in a very efficient way, apply them against an invoice, let's say, or if it's a partial payment, I can still apply it against that invoice and Abacus will track the balance due. That's one of those prior balances where maybe if somebody has paid partially, Abacus is still tracking the remaining balance due on that invoice and as you go forward, additional payments can kind of come in and you can make sure that you're tracking those accurately.
Also wanted to point out this button which I think is helpful, and this is where I can very quickly see for a matter the billing detail. Right? Past payments or past statements and things like that that have come in and gone out. I can of course print this at any time or view an individual invoice for more granular information about what work was performed, fees and expenses that were part of it. Really the goal is just a matter of billing detail and activity gives you at a glance the history on a case by case basis. Might not be something that you need all the time, but it is a handy reference right here as you're entering payments and applying them against outstanding invoices.
I did want to kind of touch on the breakout. This is an aspect of … Bear with me for one second. I'm going to enter the amount of the payment. I enter the payment, and then I apply it against an invoice, and then I can have Abacus manage the breakout. How it's going to be applied or what amounts I should say or percentage it's going to be applied to the different components of the invoice, and then of course the fee distribution as well. If by timekeeper or by percent. Let's say I'm breaking out or I'm distribution fees that are coming in, the current payment, it's a nice way to be able to manage that right now in a nice, efficient way.
Okay, so the ability to kind of track those incoming payments, associate them with the right invoice and the right case is a good way to enter that information. Then of course the last step is to make sure that I post that, those incoming payments so that in a reconciliation process the moneys are applied to the right account in the right amount and of course the right case. Of course, I can generate a receipt as needed if that's something that you're interested in doing as well as the deposit slips. All right? It's a nice way to kind of be able to take those incoming payments, post them either individually or as a group, and make sure that your accounting system is kept up to date, right?
For thinking about the billing lifecycle, we have the start where you're capturing the information and kind of associating with the right case file and the right timekeeper and the right rate and so on, the duration of time, all those good things, the description of the work done. The printing, the billing, the invoicing, where your pre-bills, your actual bills, and your posting of bills gets you to the point where those invoices are out, you're tracking them for receivable purposes, then the payments is really kind of the other bookend of your billing lifecycle where you're taking those incoming moneys, associating them to the right account, the right amount, the right case, and the right client, and then posting them to make sure that your bills and from a general ledger standpoint, the funds and moneys and financials from a general ledger perspective are tracked and updated and kept current for you.
The other thing maybe just to wrap up, some of the other things that have come up, I mentioned kind of an AR receivable aging report being able to identify any cases or clients that might be, you know, that are at risk or overdue. There are a number of ways that you can track your billables. An example would be an interim statement. At any point, you can actually create an interim statement and use it as a reminder. Let's say you have a report that shows you unpaid invoices over whatever, 60 days, 90 days, whatever the case may be. You could actually generate an interim statement to send to those clients or those cases. That interim statement would show current moneys due and a breakdown also of other activities that were part of the original invoice, but the interim statement functions as an effective reminder to send out.
I also wanted to touch on the combined matter covers page, or cover page, excuse me. This is where you have the ability in the accounting program as you're generating an invoice in that billing lifecycle understanding that let's say I have a client and I'm working on seven different cases. That cover page, that combined manners cover pages gives me the ability to give to the client a summary, a one page summary that shows subtotals for each of those specific matters that I'm working on for that time period and then a grand total with the subsequent pages being the actual invoice as we looked at earlier. The actual statement that pertains to one of those seven.
You can in essence create a packet that you can deliver to the client as part of the billing lifecycle where that summary page, that cover page is an efficient way to give them specific information or I should say general information about all activities and moneys due with the detailed invoices being also available as part of that packet. That's kind of a quick overview of the billing lifecycle within Abacus Law. Understanding that your time tickets, the ability to kind of have either the time keepers themselves enter their information, kind of bill for it with a few clicks as close to real time meaning when they actually performed the work, or if it's that's something where it's delegated to someone else in the firm, that individual can certainly come in and add any number of time tickets for multiple timekeepers.
All right, so that's the starting point. You have access to some reporting on information, billing activity by timekeeper, productivity reports, and AR tracking, and then of course the billing lifecycle itself. The component of invoicing where you're doing your pre-bills, you're doing your actual bills, and posting of bills. Your trust accounting, the ability to deposit moneys into one or more trust accounts, to write checks and automate the check request process and then of course being able to report and manage payments, I'm sorry, report. I'm sorry. Manage payments as they come in against outstanding invoices, make sure that they're accurately entered in the system, and then of course manage the whole process with reports and ensuring that your general ledger and all accounts in your chart of accounts are tracked and managed for you with those reports really giving you insight.
You know, exactly the firm's balance sheet. Your financials, your productivity, your profit, and things like that are all available within Abacus Accounting as part of your billing lifecycle. I appreciate your attention. I look forward to any questions that you have and any conversations. You know, you may be using parts of this, parts of the lifecycle we discussed today or all of it, but there's training available to you and other ways of maybe unlocking some of the core features, whether it's day to day information tracking or reporting. That's something that we help and that we have training available for you to help you gain even more value out of accounting component and to find efficiencies in your billing lifecycle using a lot of the core features we discussed today. I appreciate your attention and I look forward to next time.
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