Disbursement (Outlay) or Recovery?

This page is designed to help you determine if your transactions should be entered as a Disbursement (Outlay) or Recovery.

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1. Disbursement OR Recovery
   
   

   When you enter a transaction, you need to ask yourself the following questions:

   1. Is my transaction directly relating to a file?

   2. Is this transaction going to end up on the bank or credit card statement for exactly this amount? (within a time frame manageable by your bookkeeper)

    

   If you answer both of these as YES then you need to enter your transaction as a Pay Now Disbursement.

   
   Example: Paying for a Medical Report from the Credit Card for a client and it needs to be entered to Wise Owl Legal as a Pay Now Disbursement from the credit card account so it will be charged to the client it was incurred for.

    

   If you answer a as Yes and b as NO then you need to enter your transaction as a Recovery (Paid Already).

    

   Example: You have purchased a box of Postage Stamps and use 1 for a letter to a client. You would put in that 1 stamp as a recovery to bill to the client

   Anything paid from Petty Cash for clients will also go in as a Recovery.

    

   If you answer both of these as NO then the transaction should not go into Wise Owl Legal. Your Bookkeeper will need to enter this directly to your external accounting system

   Examples: Purchasing milk from the local supermarket for the office on the Credit Card; buying stationery ; paying rent;  purchasing a box of 100 postage stamps.

    

2. Payment of Citec
   
   

   If you pre-pay for your Citec searches and then top up your account regularly, pay your searches from this and don’t reconcile it, then all Citec Searches for clients will need to be entered into Wise Owl Legal as Recoveries. 

    

3. Pay Later Disbursement's
   
   

   Pay Later disbursements will invoke the Accounts Payable module in your accounting system.   There is specific legislation that prevents law firms from receipting money into General if there is unpaid invoices charged to the client (ie Accounts Payable).
   
   If you have a bookkeeper regularly processing payments, this is a really good way to manage invoices the firm has outstanding for payment.  However if your bookkeeper only comes in monthly, this might not be for you as, in line with the legislation, you will be prevented from receipting client money in Wise Owl Legal if there is unpaid Accounts Payable invoices included on the client’s bill.

    Please only use the Pay Later Disbursements when it is actually an Accounts Payable that will not be paid for a while.  Remember you will be prevented from receipting client money in Wise Owl Legal if there are unpaid Accounts payable invoices included on the client’s bill.

    

4. Dye & Durham accounts
   
   

    An option for Dye & Durham when paid on account is to open a bank account in Wise Owl Legal and your accounting system called Dye & Durham.  You can then have the automatic payments generated by the Dye & Durham process directed to enter as a pay now to that bank account when each search is done and then when the payment is made from the bank account, you can do a transfer in your accounting system from the bank account to the Dye & Durham account.   

   
   It will then be the practitioner's responsibility to ensure the specific Dye & Durham invoices are paid prior to receiving funds from the client into general.

    

5. Items NOT to Use
   
   If you see items in your item lists or chart of accounts that start with “xx” that means they are obsolete and should NOT be used any more. 
   
   

6. New accounts

   If you have generic outlays codes that you are using frequently, please make new, specific items & new accounts for the regularly occurring outlays.  This improves the accuracy of your general ledger reporting.   It also helps management see if all expenditure on client outlays is in fact being recovered in a reasonable time frame.