Legal Fee Advance Request - Quick Tour

This is a quick tour to illustrate the steps involved when you want to request an advance from your client for legal fees. This may be used to request advance payment from your client for legal fees, such as court costs and to keep track of receiving and reimbursing the advance.

We will cover:

Legal Advance Request - Posting a fee transaction for the requested advance amount.
Legal Advance Received - Posting a payment for the amount of the advance when it has been received from your client.
Legal Advance Reimbursed - Posting a payment for the amount recovered and reimbursed to your client when the debtor makes a payment.

We will create a transaction type to use for each of the steps outlined above and post the necessary transactions to a debtor's account.

If you are not familiar with creating transaction types or posting transactions, before proceeding, please refer to Transaction Type Basics and How To Post A Transaction.

Legal Advance Request

The first step is to post the requested advance. This is charged by posting a Fee transaction for the debtor whose legal fees you need to cover.

Collect! considers 200 series transactions as Legal transactions so we will create a Legal Fee transaction type in the 200 series. The settings for the Legal Fee Advance Request are shown below. This transaction type may be used to request an advance from your client to cover legal fees, such as court costs.

Legal Fee Advance Request Transaction Type

Once this transaction type has been created, we can post a transaction as shown below to the debtor's account to request the advance. Notice that the amount of the advance is entered in the Commission Amount field as a POSITIVE value.

This sample transaction shown below is requesting a $200 advance from the client for legal fees.

Legal Fee Advance Request Transaction

When the month end statement is printed, the Legal Fee Advance Request transaction will appear as a commission amount that the client owes you. This begins the paper trail for keeping track of the amount that has been requested, received and reimbursed.

These transactions will not affect your Daily Cash Report. A custom Daily Cash Report may be used to keep track of these monies on a daily basis.

If you are able to charge the debtor for the amount of the legal advance, post a 200 legal fees transaction to the account, as well. You will need to place the amount of the advance in the To Us field as a NEGATIVE value. For more information about Legal Fees please refer to Transaction Type Sample - Legal Fees.

Legal Advance Received

Next we will need to handle the money received from the client in response to our request. When the advance monies are received, we post a payment using the Legal Fee Advance Received transaction type.

Collect! considers 100 series transactions as Payment transactions so we will create a Legal Advance Fee Received transaction type in the 100 series.

The settings for the Legal Fee Advance Received are shown below. This transaction type may be used to post the receipt of an advance from your client to cover legal fees, such as court costs.

Legal Fee Advance Received Transaction Type

Once this transaction type has been created, we can post a transaction to the debtor whose court costs you are covering. Notice that the amount of the payment is entered in the Commission Amount field as a NEGATIVE value.

This sample transaction shown below indicates that a $200 advance was received from the client as a legal advance.

Legal Fee Advance Received Transaction

When you generate your month end statement you will notice that the amount that received is reflected on your statement. This adds to your "paper trail" on the statement.

Legal Advance Reimbursement

When a payment is received from the debtor, you will need to reimburse the client for the amount of the advance. This is taken from the amount collected from the debtor. For this, we use a Legal Fee Advance Recovered payment transaction type as shown below.

Legal Fee Advance Recovered Transaction Type

Once this transaction type has been created, we can post a transaction to the debtor for the amount that has been recovered.

Below is a sample of posting $200.00 recovered from a debtor and reimbursed to the client.

Legal Fee Advance Recovered Transaction

When you generate your month end statement, you will notice that the entire amount of the transaction posted is credit to your client.

This payment will not be reflected in your daily cash report. It is necessary to use a specific daily cash report designed for your advances. This report is available upon request from Collect! Technical Services and may be edited for your particular setup.

Summary

We have demonstrated the entire process of handling a request for a legal advance from your client.

This includes:

Recording the request as a fee posted to the debtor's account
Posting a payment when the advance was received from the client
Posting a reimbursement when the funds were recovered from the debtor

Samples of the legal advance request may be found in the Demonstration database that ships with Collect!