You can create disbursements automatically when entering a firm withdrawal. These are known as "hard" disbursements and would only be used when using "in-built" Actionstep Accounting.
To enter a firm withdrawal you can follow these instructions: Firm Withdrawals
In order to bill the firm withdrawal directly on to a client's matter, you can choose the matter associated with the withdrawal and then tick the bill box to bill that expense on to your client's matter.
In my example below I have paid court fees from my business current account, and so when entering this withdrawal, I have also created a disbursement against the client matter so that I am reimbursed for this expense.
|TIP: If the expense account you use on your firm withdrawal has a corresponding income account in the chart of accounts, then the disbursement billed to the matter will automatically use the corresponding income account.|
In the instance outlined above, my expense account for Disbursements has a corresponding income account for disbursements in my chart of accounts. Remember: When we are entering an expense it has cost us something and so it will show as an expense in our accounts. However, when we will bill this on to our client it will be income and they will be paying it to us so it will show as income in our accounts.
So, when I enter a firm withdrawal using this expense account and bill it onto a matter, the disbursement will automatically use the corresponding income account as shown in the screenshot above.
This disbursement is automatically created going to the corresponding income account as indicated in my chart of accounts.
Tax on hard disbursements
|WARNING: It does not matter what tax status you choose when entering your expense line item in the firm withdrawals - this is not the tax status that is inherited when the disbursement is posted to the matter. IT IS IMPORTANT THAT YOU ARE AWARE OF THIS.|
When a disbursement is added to a matter from a firm withdrawal, the accounts list is first checked to see if there is a disbursement tax code against it. In the example above, we used the expense GL code 6-3005 which has a disbursements tax of N-T (No Tax) so no matter what I have entered in the firm withdrawal screen the disbursement will first and foremost take on this tax code.
However, If the disbursements tax code is set to default, this means that the tax applied to the disbursement will be inherited from the matter billing options tax setting.
Matter Billing Options Tax setting
The disbursement will never inherit the tax that is applied when the firm withdrawal is generated. It will be inherited from the options set against the account code in the accounts list and if set to default, it will inherit the settings applied in matter billing options. If the latter, then the tax will change if the matter billing tax options are changed.