Separating 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 (e.g., 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 add them to 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: 

1. Create a separate "income" general ledger account to which these "expenses" will be allocated. (See Adding a General Ledger Account for help.)
   
   For this example, we will create a general ledger account under income called 4-1300 - Office Expenses.
2. Make a note of the GL account number that you are allocating these expenses to. This is because you will need to remove these from your disbursements on the invoice and make sure they are under a new heading called Office Expenses.
3. Review this sample invoice (click here to download a copy of the template):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 want to show only line items that have been coded to the general ledger account 4-1300.
   
   The following example is a disbursement for an administration charge:
   In this example, there 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 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.
4. In the invoice example above, review the conditional merge fields under the Disbursements heading.
   
   You should see all line items under 4-1300 (as these are shown under the Office Expenses heading) will be deleted as well as 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 the following. If it is not, you need to change the invoice template to the correct general ledger account codes so that it will work correctly.           

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