Writing Off Unbilled Time and Disbursements

Modified on Mon, 28 Apr at 9:52 PM

In this article

Writing Off Fees and Disbursements
Recording Disbursement Write-Offs

Using Actionstep, you can write off the billable portion of work-in-progress (or unbilled time or disbursements) without losing track of the hours worked and its traceability to the fee earners that performed the work.

Work-in-progress (or WIP) represents billable hours and expenses incurred on client matters that have not yet been invoiced. At times, you may need to write off this WIP, which is essentially removing unbilled or incomplete work from your firm's financial records. You may need to do this when the value of the work cannot or will not be recovered, often due to client disputes, pro bono adjustments, or strategic business decisions.

Actionstep allows you to select one or more time entries and unbilled disbursements for write-off. Information about the write off (like the name of the person who performed the write-off and their reason for doing so) is tracked for record-keeping purposes. Additionally, WIP write-offs are accurately tracked in their related reports.

Writing Off Fees and Disbursements

Before you begin:

An admin user must enable this feature in your system. This can be done by going to Admin > General settings > Feature preview and toggling WIP Write-offs to on.

To write off fees or disbursements:

In Actionstep, view the matter with WIP you want to write off.
Click the Billing menu icon. The Billing page appears.
Using the links on the left side of the page, click Fees or Disbursements, depending on which type of item you want to write off. The page is updated with a list of that type of expenses.
Select the checkbox next to unbilled expenses you want to write off. You can select as many as needed.
Click Write off.

The Write Off Time Entry window appears.
Review the list of expenses you want to write off and enter a Reason for write off.
Select Confirm write off.
Click Write off. The expense is updated to show a status of “Written off”.

Here are some additional things to note:

You cannot write off anticipated disbursements. Instead, it’s recommended you just delete them.
You can reverse a WIP write-off from Billing > Fees and Billing > Disbursements by selecting the expense, clicking Edit, and then clicking Undo write off on the window that appears. This sets the billing status back to Unbilled.
In Custom List Views, the Time Entry List Views list includes three columns that cover write-off details. These columns are Reason for write off, Written off by, and Date written off. (You can access this list view by going to Admin > Custom list views > Time entry list views.) (These options are not yet available for disbursements.)
The Time and Fee Entries Report includes an Advanced filter called Bill status that now includes Written off as one of its options.
Both the Detailed WIP and Aged WIP reports exclude write-off details.
The Invoice Write-Off Report helps distinguish the type of write-offs it covers.

Recording Disbursement Write-Offs

When writing off a disbursement, the transaction will not be recorded on the general ledger. To adjust for this, follow these instructions:

Each of these options is described in the following sections.

Creating a New General Ledger Account

You must create a new general ledger account where you can enter general journal entries for disbursements that are written off.

See Adding a General Ledger Account for instructions.

Writing Off a Firm Withdrawal and Paid Supplier Invoice Disbursement

When you write off a firm withdrawal or paid supplier invoice, it affects the general ledger and the disbursement is still shown in the original expense account it was allocated to. To fix this, you will need to create a general journal entry.

To do this:

Complete the write-off as described in the first section of this article.
Once you've written off a disbursement, the disbursement is still shown in the original expense account it was allocated to.
To show the expense of written-off disbursements, create a general journal entry by going to Accounting > Accounts > General Journal. (See Creating General Journal Entries for help).
The journal entry should include the following information:
- Related Contact: Enter the client's name.
- Date: Enter the date of the journal.
- Amounts Include Tax: Select this option to indicate if the amount includes tax. (Generally, this is not the case.)
- Journal Memo: Enter a description/details of the journal.
- Account and Amount: In the table, provide at least the Account and Amount information for both the disbursement written off and the original account where the disbursement was allocated (e.g., Disbursement Costs (no VAT). (Providing both a debit entry and a credit entry ensures double entry.)
- Enter any other required information.
Click Post when you're finished.

Writing Off an Unpaid Supplier Invoice Disbursement

When you have a supplier invoice that is unpaid and you either receive a credit back from the supplier or you no longer need to pay the disbursement, you can write off the disbursement from the matter and then apply a credit note to the supplier invoice. You can allocate the credit to the same account the supplier invoice was allocated to.

To do this:

Complete the write-off as described in the first section of this document.
Add a credit note to the Supplier Invoice since it does not need to be paid. The help article Crediting Refunds or Discounts on a Supplier Invoice/Vendor Invoice includes the full set of instructions.

Once you have applied the credit note to the supplier invoice, the supplier invoice will be removed. This will allocate the credit note to the original account the supplier invoice was allocated to (e.g., Disbursements Costs and the VAT/GST accordingly: DR Accounts Payable, CR Disbursement Cost, and CR Sales Tax Paid).