Fixing a Client Hard Cost Credit in ProLaw

Even with the most meticulous bookkeeping, sometimes things go awry. A common scenario for legal practices is a hard cost credit that results from voiding a check. This can happen if a duplicate payment was made, and now you have an outstanding credit that needs to be properly applied to a client’s account.

This can seem like a complicated process, but with the right steps, you can quickly and accurately resolve the issue and ensure your client’s ledger is correct. Here’s a guide to help you manage client hard cost credits.

Step 1: Research the Duplicate Cost

Before you do anything else, you need to understand the situation. Look into the matter’s hard costs to see which have been billed and paid. You can find this information by looking at the transactions and the general ledger. This research will help you determine which of the following scenarios you’re dealing with.

Scenario A: Client was billed for both costs and paid both.

This is the most straightforward situation. Your goal is to issue a refund check to the client and then bill a net $0 bill.

1. Create a hard cost check payable to the client. This refund check will offset the duplicate payment.
2. Open your Transactions and then Statements/Prebills.
3. Bill the matter for both the credit from the voided check and the new hard cost you just created. This results in a net $0 bill.

Pro-tip: While you could run two separate bills and apply the negative invoice to the positive one, these steps are faster and more efficient.

Scenario B: Client was billed for both costs, but has only paid one.

In this case, you’ll bill the client for the credit hard cost and apply that credit statement to the outstanding one.

1. Open your Transactions and go to Statements/Prebills.
2. Bill the matter for the credit from the voided check.
3. Open your Journals, and for your general checking account, create a $0 deposit.
4. Apply the negative bill to the outstanding one, which will bring the balance to zero.

Scenario C: Only one of the duplicate costs has been billed; the other is still in WIP.

This scenario is less common. When a check is voided, most systems will automatically delete the hard cost transaction if it hasn’t been billed yet. But if you do run into this, you just need to bill the credit and the remaining positive cost, creating a net $0 bill.

1. Go to your Transactions and then Statements/Prebills.
2. Bill the matter for both the credit from the voided check and the new hard cost you just created.
3. And you’re all done! The books are now balanced.

How to Create a Refund Check

When creating the refund check, it’s essential to use the same accounts and components as the original voided check. This ensures that the transaction is correctly recorded.

• Look at the original voided check to see which general ledger account and component were used.
• Go to Journals and enter a hard cost check.
• The payee is the billing party on the matter.
• The offsetting GL account should be the same as the voided check’s.
• The transaction uses the same component as the voided check’s transaction.

Following these steps will ensure that your client’s accounts are accurate and that all transactions are properly documented. A little attention to detail now will save you a lot of headaches later on.

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