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Understanding Disbursements

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, and so forth.

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.)

NOTES: 
• 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.
• Admins can control whether specific user roles can edit existing disbursements, including changing disbursement amounts. Admins can set this data permission by selecting the affected System Role, the System Object > Timesheet Record Entry, and toggling can_edit_disbursement on or off. (See Configuring System Roles and Data Permissions (Admin) for more information on  setting data permissions.)

 

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