About Using Client to Disbursement Transfers (UK)

Before you get started:  

• This feature is only available to UK users using Actionstep's native accounting features. 
• To use this workflow, the related system accounts must be set up. See Setting Up Actionstep to Use Client to Disbursement Transfers for help.
• This feature is currently not supported for use with Xero or QuickBooks Online. 

You can transfer funds from a client account to a firm account to reimburse the firm for the costs you have paid. The client will still be billed for all costs that are incurred, but this allows the firm to reimburse itself from the client account before the bill is issued. (Note: In the UK, you are required to have an agreement with your client that allows you to do this.) 

A client to disbursement transfer can be made for any matter with 1) a client account balance, and 2) a hard disbursement that has not been billed.  

When completed, the transfer will: 

• Create a client account payment from the client account. 
• Create a deposit into the firm’s operating account. 
• Mark the hard disbursement as recovered. 

Once saved, the transfer will be treated as a client account payment. It will be shown in all client account reports, reconciliations, and statements—just like a traditional client account payment. 

When billing, any hard disbursements that have been part of a Client to Disbursement transfer are still billed as normal and the recovered amount is credited against the bill. This means the bill will still show the same total, but the amount owing for the bill will be reduced by the total of all recovered amounts. 

Accounting-wise, when you create a client to disbursement transfer, two things happen: 

1. Actionstep records both a trust transaction and a firm transaction:  
   • The trust transaction pulls the funds from the client bank account, which offsets the client liability account.
   • The firm transaction adds the funds to the firm’s bank account and adds a credit to the client to disbursement system account. (See the next section, “Setting Up Actionstep to Use Client to Disbursement Transfers”.)
2. When an invoice gets created and approved and the disbursement allocation credit is applied:  
   • The firm’s income account is credited.
   • The client to disbursement system account is debited.