NOTE: In the U.S., disbursements are called expenses. Throughout this article, any reference to a disbursement also means an expense.
Disbursements (known as expenses in the U.S.) are the costs incurred by a firm in connection with a legal matter, apart from the lawyer's fees. Depending on the circumstances of the matter, disbursements may include application fees, expert opinions, court hearings, and filing fees, interpreter's fees, etc.
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 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. (See Creating a Disbursement from a Supplier Invoice for instructions.)
- 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. (See Entering Disbursements for instructions.)
NOTE: In some regions (e.g., New Zealand) there is a requirement to separate hard from soft disbursements on an invoice. This means that hard disbursements will be listed under Disbursements while soft will be listed in a different group of expenses. To learn how to create a template that does this, see Separating Disbursements From Expenses on an Invoice.
Additional Resources:
- Entering Disbursements
- Creating a Disbursement from a Firm Withdrawal
- Creating a Disbursement from a Supplier Invoice
- Working with Anticipated Disbursements
- Creating a Disbursement Template (Admin)
- Creating a Custom Disbursement List View (Admin)
- Separating Disbursements From Expenses on an Invoice
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