Paul W. Carlson, CPA (00:00):
Hi, this is Paul Carlson, CPA, with Law Firm Velocity.
(00:03):
In this video, we are creating an invoice for the firm's fee on a contingency matter. We need to create the invoice within Soluno so we can apply the payment to the invoice, and that invoice payment will generate and feed through to management reports and to the firm's income statement. So how we create that entry is we create a time entry for today's date, the file. Select the fee earner who's going to receive credit for the fee. Do one hour for the full amount of the fee, and we're ready to go. The tricky part is understanding how this entry feeds through to the income statement and other management reports so let's go look at the income statement.
(00:53):
Soluno reports revenue by the fee earner associated with each time entry, so the simple version is, Madeline has $25,000 worth of time entries that were collected within this timeframe. What we did as a prior test, we gave her a $25,000 contingency fee, gave her full credit, and that's how it appears on the income statement. And so, sometimes firms don't want the contingency fee to be associated with a person, that they want the revenue to be associated with maybe the practice area or, in this case, we're doing a complex setup for a social security long-term disability company where they have fees for a matter that can go into one of many different categories.
(01:54):
How we support that within Soluno is we have created several phantom users, that we have a user named, let's use insurance bad faith for back benefits, their initials. And so, any time entries associated with this user, it's going to come up with this identifier on the income statement. Nice thing within Soluno is you can create the user and then disable it, so this user is only used for reports that the firm is not going to get charged for these additional users. Let's go back to that time entry and let's change this to one of the phantom employees, so we'll do Arisa back benefits. And so, now when we select that, that will be reported under that feed line on the income statement. Let's change this back to 35,000. Okay, so we have our time entry, so we hit save.
(03:03):
Now the billing process is same thing we did in the prior video for advanced client costs, we select our file, set our dates. That's good, so we're going to process this and send it to review charges. Going to review, so we're going to hit the pencil, spanned everything. So we have our time and so we know that we want this $35,000 to appear on the income statement under that description. That's exactly what we're looking for so we click okay. Since this is good, we can send this to release, but we know the invoice is already good so we're just going to skip that step and hit process and we're set. All right. And with that, the invoice is done. Back on the review charge, if there was already trust money on the matter we could have used trust money to pay the invoice within that one step. Or we can wait, and then once the firm receives trust we can go ahead and do a transfer to apply trust money to the outstanding invoice. Thanks.
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