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Soluno Contingency Workflow Demo

Soluno Contingency Workflow Demo
Soluno Contingency Workflow Demo
Written by
Paul W Carlson, CPA
Published on
Dec 13, 2023

Paul W. Carlson, CPA (00:00):

Hi, this is Paul Carlson CPA with Law Firm Velocity. This video, we're doing a demonstration of a contingency based matter within Soluno. Soluno is a newer accounting system with built-in case management. And the best way to actually test the system for your firm and to understand how the tool works is to walk through the lifespan of an entire matter.


So the big difference with Soluno and a lot of other systems firms are using is Soluno, is combined accounting and case management. That when you put a transaction into Soluno, it both goes into the matter for matter management. And that same transaction is also posting to the accounting system. That it's one in the same, that we're leaving the era of where you have to double enter transactions into QuickBooks and a separate practice management system.


So let's go over into Soluno, and we're going to run to this example. We're going to add a new client. The matter came from a Google ad. We have a couple costs on the case. We're going to receive a settlement. The firm is going to recover costs and a contingency fee, and we're going to write the client a check for the balance of the settlement proceeds. So jumping over to Soluno. One thing I want to notice is this is the login or my limited login for Soluno that restricts access to private information.


So if I go to the owner vendor that I cannot see any owner draws, and when I go to the banking report screen, all I see is a credit card that's been assigned to this employee and the operating account that the owner account with the owner draws and payroll detail and other sensitive information, I can't even get to that from this login. So this login, this example, is what a case manager or our office manager would do within Soluno to run cases that the financial accounting is run by firm controller. So first step is we need to add a contact. So this contact is going to be client S.


So if this was real, we would include all the other details so we know how to contact the client. To save time, we're going to skip some of that detail. And then we're going to write a check to this client for their portion of settlement proceeds and to allow that check to be printed as we need to tell Soluno that they're also going to be treated as a vendor. So that's adding the contact.


Now we need to add a file or case, and so we're going to have case 10-10, and this is from client S. Area of practice is personal injury responsible. We'll say Janine is responsible for this matter. Matter name is going to be client S matter. And the one piece we want to pick up when we create the matter is we want to identify the lead source for the matter. So this matter originated through a Google ad that when we're done, we can run a report that details revenue by lead source. So there we've created our file. So now we're running a case and we have to buy a medical record. So we're going to go to operating out. We're going to use our credit card to pay for a $20 medical record from Trinity Health Center.


And the file is for client S. And Soluno has these awesome abbreviations. So you can set up these codes and you type in the code and it types out the long explanation, and it appropriately codes the hard cost to a capitalized hard cost. So we're following IRS rules and hard costs are going straight to the balance sheet. We're not expensing them. And that is how we go ahead and put in the credit card entry.


The trick here is that every person in the firm who's buying medical records or incurring hard costs for clients has their own login and they're entering costs as they go through the day. That they know exactly who this $20 charge goes to and they can post it as the charges incurred. So that's how we do a credit card charge. Save that. We also have a... We're going to pay an expert witness from the operating account for services. So we're going to use operating account. This is a thousand dollars and this is paid to our favorite expert witness service. And this is for client S. So we just select the matter. Not sure if I have an expert code in here. Oh, here we go. Experts. And again, it's getting coded to the hard cost. We can override this. And we can list what we purchased.


We have better detail from this system. This is currently set up that Soluno can... You can enter a bunch of checks you need to print and then go to a separate screen and print that batch of checks at once. We have those instructions in a course that we're going to go ahead and say, this is a manual check. And so we wrote this on check that number. And so there we have recorded our hard costs on the matter. Now let's not restart there. Okay. So there's the cost we incurred on the case.


At this point, we're getting close to settling and we want to see what costs we have on the matter. So we can go in and search for client S, go into the ledger, and we want the client ledger. And so here we have a report of the hard costs that have been incurred on the matter. We have our medical record for generative health. We have our expert witness charge, and we get this little summary down here that says that we have unbilled costs. We can print this as a report if we need that for documentation for settlement, but again, end users can log in and see costs from the accounting system.


So now we've settled, and so now we need to record our settlement proceeds. So we're going to put the settlement money into trust account. One, we received $100,000 and it was a check. Do I have an insurance company in here? Yes. We got our check from the insurance company Z. We're going to put a memo of check number there. And this is for file for Client S. And so I brought up the client. We can change this.


All right. And so that is how we record our trust money in. So we can go ahead and click save. To hammer home, the concept that Soluno is the case management system and the accounting system for larger firms. We will actually go in and tie the Soluno bank records to the bank statements we see online that we're basic... We're doing weekly interim bank reconciliations to confirm that the values within Soluno are always up to date. Whereas, when you're using QuickBooks and another practice management system that don't talk to each other, that process takes a long time. So we only do that once a month. With Soluno. We can keep on top of things a lot better.


So there's our money in. So we're going to hit save. The official way I'm going to do, this is a simplistic way for this demo, that there's a more complex way that we have over in our training course. So the first check we're going to write on the matter is we're going to do an EFT to the firm for fees and advanced costs. So it's going to be to the law firm, PLC, client, or the file is Client S.


Tab over. And Soluno is displaying the trust account balance right on the screen. So as we write our check, so we're going to put a description of $30,000 contingency, 1000 020 hard costs, and we go ahead and we could print this check to the firm. So you're going... So we would go do this transfer from trust to operating. Now let's print that check for the client. So the client is getting 68,980 Client S file. Again, we're going to pull up Client S. So it tells us how much is in trust. We can do client proceeds. Sometimes firms will type in the math. They'll say it's a hundred thousand dollars settlement, minus 30,000 contingency, minus hard costs, and they'll actually run the math to describe it.


Another nice thing with Soluno is we make this dollar amount. Let's go ahead and make this for $70,000. All right. So we're going to hit save. Go ahead and hit save. And the Soluno gives us a warning that we're going to overdraw the trust. So this is tremendous that you have to have to specify who's approving overdrawing trust before this transaction will go through. Making this come up because if you use QuickBooks for trust accounting, QuickBooks has no controls over client trust balances. It will let you print endless checks. It doesn't know client balances. So with this, we're going to say, oopsie daisy, this isn't right. Yeah, I messed that up. That the client should only get 68,980.


The client should get 68,980. Delete that. And so this is actually queued up to print,. I never print, and we're going to use check number this, and we're set. So now we need to go with the operating account and record the deposits into the firm's bank accounts. So to do that, we need to create a couple invoices. So these invoices are for accounting purposes only. You might use the cost invoice and give it to a client as a statement, but sometimes firms usually don't hand these out. This is more just how to record transactions within the system. So this is Client S. We're going to make an invoice. This was Janine's matter.


So here we have our invoice for the hard costs. We can click in and review detail on the invoice. And that's exactly what we're expecting. So we're going to say, go ahead and finalize that invoice. So this is for the hard costs. So now we need to make an invoice for the fees that were earned. So there we're going to go do a time entry for Client S. Task is billable work. The fee earner that this changes depends on how the firm is structured and how they want the income statement to work. So sometimes this will be the responsible attorney.


So since this was Janine's matter, we'll give her the fee. And so the contingency fee was $30,000 and that's all we need for that. So now we go make an invoice for the fee. And the reason I did the cost invoice separately from the fee invoice is sometimes firms will use the cost invoice as a way to summarize cost to their clients. And so they'll give that invoice to the clients, but they usually don't want to hand them the invoice for the fees. It's really up to the firm. And we can change that process to the way you like. The invoice only has one charge for the time on it, so we don't need to look at that. Okay, and so now we need to record, we're going to deposit that $31,020 [inaudible 00:14:21] check into the operating account, and we need to record that deposit.


So we're going to do today's date. It's going into the operating account. The amount was the 31,000 020. It was an EFT because we did the transfer. The funds are coming from Client S. Soluno will pops up and says, are you paying this hard cost invoice? Yes. Are you paying this fee invoice? Yes. Click okay. And with this, we hit save and we've recorded our deposit into the operating account, and that is the full process.


To recap, let's go back and look at the file manager, look at the ledger, and let's walk through all the detail we can see on this client ledger. So here's our hard cost. Second hard cost. We received a hundred thousand dollars into trust. We wrote $31,020 of disbursement to law firm PLSC. We can see it was for 30,000. Our contingency 1,020 hard costs. We can see we paid out the 68,980 to the client for client proceeds. Then down here we can see we added the fee, our contingency fee. Here we created the invoice for the 30,000 contingency fee. And then here we have the payment that covered everything. Down below we can see that we have disbursements of 1,020 fees of 30, and we've received the full balance. So with that, that's a summary of running this case through Soluno.


Again, just to reiterate, this was all done within one system that the hard costs were only entered into one place, and we were keeping track of those costs in real time. The trust deposit was entered once we didn't have to enter this into two systems. The settlements, again, were recorded once we didn't have to record those into QuickBooks and Clio. And then we were just getting real-time reports that anyone within the firm could safely pull at any time. Thanks much. Bye-Bye.