At times you may receive overpayments from your clients that you need to track. There are a few workflow options to choose from to record and track the overpayments. This articles uses the example of a client that has overpaid a bill by $50.
When the overpayment is applied to the bill, the overage amount will be added to the Operating account, allocated to the client's Matter. We recommend that you show the Client Account Payment information on bills so that your clients' can see the overpayment amounts you are holding on their behalf. See the Client Account's on Bills section of this article to learn how to update your Bill Themes.
Go inside the bill and click "Record Payment":
Next, keep the "Source" account to "Direct Payment" and change the "Payment" amount to reflect the overpayment, and click on "Receive Payment".
In this case I added an extra $50.00 to the payment.
After you refresh your browser, the overpayment will display in the Operating account area towards the bottom of the bill. In this case, the Operating account is holding the $50.00 overpayment for the client.
Once the overpayment is applied, it will add the overage to the Firm's Operating account and allocate it to the Matter to be used on future bills. You can track the funds from inside the Matter's Transactions tab.
In this workflow, you would record the amount received in the Matter's Transaction tab first, then you would apply the payment to the bill. This is helpful if you need to have the funds added to a specific account such as a Trust account, and also if you have received the client payment before you are ready to work on your bills. When applying the funds to the bills, the specific "Source Account" that is holding the funds will need be selected instead of using the default "Direct Payment" option. Using the same example as above, let's create a transaction to reflect the full payment of $675.00 which includes the $50.00 overpayment.
Go to the Matter's Transactions tab, select the account from the Ledger of where the funds need to be recorded and click "Add":
Complete the New Transaction form to provide the details of the amount received and add an optional Description which can be quite useful for tracking purposes.
Once saved, the transaction will show the new payment and current balance.
Next go to the Bill, and click "Record Payment" as demonstrated previously.
Then from the "Source" field, click the drop-down and select the account where the funds were previously recorded. In this case the funds are in the IOLTA trust account, and once selected I can see the "Matter Funds Available" section at the top of this window displays how much is in the IOLTA account:
With the correct "Source" account selected there is no need to change the Payment amount. Simply click on "Receive Payment": In this example, the bill shows that the payment of $625.00 was applied and that the balance owing is zero. In the Client Account section, the $50.00 overpayment is reflected as a balance in the IOLTA Trust.
In this workflow, you would simply pay the bill normally using the Direct Payment default or other Source account. Then once applied, you would go to the Matter's Transactions tab and record the overpayment amount to the account of your choice.
Once inside the Bill, click on "Receive Payment" and leave the "Source" account to "Direct Payment" and the payment can remain as displayed. You can also add an additional note in the "Description" field:
The bill will be paid and any notes added regarding the payment will be visible in the Client Account section (if showing).
Next, record a Transaction in the Matter to the account of your choice to allocate the overpayment. In our example this will be $50.00:
The newly added transaction will now be allocated to the client's Matter and will be available to draw from on any future bills. In this example, a new bill reflects that the IOLTA Trust Account has a client balance of $50.00 which can be used to partially pay the bill:
You can also generate Client Ledger or Trust reports via the Reports tab to track the funds as needed.
Regardless of the workflow option you choose to track the overpayment, you will want to ensure that your Bill Theme is showing the Client Account information so that the overpayments are visible to your clients.
To access the Bill Theme section, click on the drop-down by your initials or picture and select "Settings > Billing > Bill Themes", then select the Bill Theme and go to "Statement of Accounts > Client Account. In the third window you can select Account Summary to show a balance in your Trust account, Account Details to show the individual transactions, and if you would also like to show Operating account information you can select Include Operating Account History.