Skip to main content

Solutions

Products

Recommended products

Questions? We are here to help.
Contact us

Purchase

Questions? We are here to help.

Resources

Financial setup

Invoicing Setup | Over-budget Audits

Matter subcategories can be configured so that the system will conduct an audit of each invoice to determine if it is over budget. The over-budget alerts are added to the invoice audit worksheet with other audits such as timekeeper rate changes.
When completing the Matter Type-Template setup form, in the
Law Firm Matter Budget - Activate over-budget auditing
 field, the selection of a time period-to-date (Quarter-to-date) versus a total for the time period (Total for quarter) determines how Tracker calculates the audit alert. With a time period-to-date audit, Tracker compares spending against the budget up to the point that the invoice was received. In the case of a total for the time period, Tracker compares spending against the total budget for the time period.
You can specify which time period will be audited.
If you change the over-budget audit setting
If you change the over-budget audit setting (e.g. change the setting from no auditing to auditing for Fiscal year-to-date, or changing the budget period of the audit), the new budget audit rules will be applied to the following:
all future invoices posted to a matter assigned to the matter category
all invoices that are currently pending the billing guideline reviewer or level 1 approver (note that any invoice pending with level 2 or higher will not be recomputed)
Thus, if you turn on over-budget auditing, and if there are one or more invoices pending approval by the billing guideline reviewer or the level 1 approver, the system will immediately conduct an audit of those invoices and show a red flag for those invoices if they are over budget.
Over-budget audits when budgets are required
The over-budget audit will be applied if a budget is required for the matter to which the invoice was posted or any budget has been submitted to the matter. In other words, the audit will be run if there is a new budget pending or the budget has been approved. This is true even if the budget was submitted and rejected.
Required role | Only a Company System Administrator can create a new matter type, and only a Tracker Coordinator can edit an existing matter type.
  1. Select
    Settings
    in the left navigation.
  2. Click
    Matter Type-Templates & Matter Setup
    .
  3. Select a Matter Type-Template.
  4. In the
    Law Firm Matter Budget - Activate over-budget auditing
     section, do one of the following:
    • Click
      No
      if you do not want the invoices to be audited.
    • Click
      Yes
      and select a
      Time Period for Comparison
       for fiscal year budgets.
  5. If you selected Yes in step 4, indicate whether you want over-budget auditing with respect to a phase-based budget by selecting or clearing the
    Phase-based Budgets
     check box.
  6. On the toolbar, select
    Save & close
    .

Selecting the budget period to audit

If you turn on the over-budget auditing feature for a matter category, you must select one of the seven budget periods. In other words, you are essentially defining what it means to be over budget.
Tracker requires the selection of a single budget period to help keep the auditing process manageable.
If multiple different budget periods were used for each invoice, there could be confusion. For example, assume a matter began in December, and assume the following budget and spending amounts for a firm in the matter:
Dec.
Jan.
Feb.
March
April
May
June
July
Budget
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
Invoices
$15,000
$8,000
$12,000
$16,000
$5,000
$12,000 pending
--
With respect to the $12,000 pending invoice that was posted for the May service period, this law firm's spending may be over or under budget, depending on the budget period used:
Budget Period
Budget
Spending
Variance
Over/Under?
Month (May)
$10,000
$12,000
-$2,000
over budget
2nd Quarter-to-Date
$20,000
$17,000
$3,000
under budget
2nd Quarter - Total
$30,000
$17,000
$13,000
under budget
2022 Fiscal Year-to-Date
$50,000
$53,000
-$3,000
over budget
2022 Fiscal Year - Total
$60,000
$ 53,000
$7,000
under budget
Cumulative to-Date
$60,000
$68,000
-$8,000
over budget
Cumulative - Total
$70,000
$68,000
$2,000
under budget
Because of this potential confusion, you are limited to picking one, and only one, budget period for purposes of over-budget auditing.
The invoice's billing period end date is used to calculate whether it will be included in the over-budget audit alert. For over-budget audit periods that are to-date (for example Fiscal Year-to-date), the Action Time Period/Phase displayed in the over-budget audit alert will correspond to the last day of the month of the invoice's billing period end date. This is true even if the actual invoice's billing period end date is before the last day of the month. For example, if the over-budget audit period is Fiscal Year-to-date, and an invoice's billing period end date is March 12, 2022, the Action Time Period/Phase displayed in the alert for that invoice will be 1/1/2022 - 3/312022 (start of FY - last day of the month associated with the billing period end date month).

This article applies to:

  • PRODUCT: Legal Tracker
  • Subject: Invoices
  • Audiences: Company