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This article applies to:

  • Product: Legal Tracker
  • Subject: Budget
  • Audiences: Company

Budget and Accrual Setup

Budget and Accrual Setup

The Budget and Accrual page is where you set up details about how Tracker handles your budgets and unbilled amounts (accruals). This page guides you through the setup process.
note
Before activating this module, you should review and follow the procedures in the Budget Setup | Overview and Checklist and Accruals Setup | Overview and Checklist if you are using the Accruals module. If you activate the Departmental Budget/Reforecast module, you may need to modify several default settings.
Required role | You must be a database administrator to edit this page. If you are not a database administrator and would like to have any of the settings on this page changed, contact your Client Relationship Manager.

Configuring Budget and Accrual Settings

  1. Select
    Settings
    in the left navigation.
  2. In the
    eBilling & Financial Setup
    section, select
    Budget & Accrual Setup
    .
  3. For
    Question 1: When entering a fiscal year budget, what is the default format?
    , select an option to specify the default format for the fiscal year budget for new matters.
    More information
    The default budget format can be important for accruals. If law firms enter unbilled amounts quarterly or once at the end of the year, the unbilled amounts from other months is generated from budget data. If users had previously entered budgets in random months of the old monthly budget format, the budget data may not be as accurate as it should be for accruals. Changing the budget format based on the way in which users actually complete the budget (for example, quarterly or one number for the year), ensures that users enter budgets consistently, leading to better accrual data.
    If the budget format is set to monthly, users cannot change the budget format in matters. (The reason is that the system is assuming that monthly detail is important, and users should not be able to change to less detailed format.) If the default setting is quarterly or annual, a monthly budget can still be used for the law firm matter budget in individual matters if more detail is required. However, if you use company matter budgets in a matter, the budget form will always be the default format that is selected in setting and cannot be changed in matters.
    note
    This setting applies to new matters. If you need to change existing matters, use the bulk update tool.
  4. For
    Question 2: Which company users can review/edit law firm matter budgets and task code alerts definitions (and Departmental Budget/Reforecasts and Accruals if activated)?
    , select an option to specify which users can edit and approve financial data.
    note
    Regardless of the setting here, all company users with a matter role of matter editor and higher will receive notifications for budget review.
    More information
    Financial data reviewers must be matter participants. Financial data includes all matter budgets, as well as Departmental Budgets and Reforecasts if that module is turned on, and law firm unbilled amounts. The following options are available for granting company users authority to review, edit, and approve financial data.
    Field
    Description
    Lead Company Person only
    Every matter has a lead company person, who is designated in the matter profile, and who has invoice review authority. Because this person has invoice review authority for the matter, they may be a good choice for other financial review authority as well. If this option is selected for financial review authority, only the lead company person and their delegates see the financial data review items listed on their pending budgets page.
    Lead and #2 Company Person
    Not every matter has an assigned #2 company person. The # 2 company person generally is the lead company person's legal assistant or a secondary attorney on the matter. If this option is selected for financial review authority, only the lead and #2 company person and their delegates see the financial data review items on the pending budgets page.
    Company Matter Administrators
    The Company Matter Administrator can:
    • Add and delete matter participants
    • Add, edit, and delete matter information
    • View all matter information.
    If you select this option, only direct matter participants and their financial review delegates will see the financial data review items on the financial review page. Users with special matter access (access to the matter because of their organizational unit or practice group) do not see the financial review items on the financial review page.
    Company Matter Editors and higher
    Company matter editors can view all matter information and add and edit matter information, but cannot delete items such as documents and notes. If you select this option, every matter participant with a matter role of editor or higher (matter administrators, lead company person and # 2 company person) see the financial review items on their financial review page.
  5. For
    Question 3: When should users be required to enter next year's budget?
    , specify the month when next year's budget is due. The setting you enter here will apply to any matter in which budgets are required, for both fiscal year budgets and phased budgets.
    The
    Completed On
     date to the right of the selection shows the data on which company users must accept or enter next year's budgets. Even if a budget has been entered for the next fiscal year prior to the due date, users are still required to approve the data as entered, or update and save the data.
    note
    The law firm date will actually be earlier. Click the
    Budget calendar of events
     link to view law firm dates.
    more info-determining when unbilled amounts are due
  6. For
    Question 4: Activate the Departmental Budgeting/Reforecasting Module
    , specify whether you want to activate the departmental budgeting module. You can also require periodic reforecasts throughout the year.
    More information
    Field
    Description
    No
    Law firm budgeting is available, and can be required for firms. However, you can only require that a budget be entered/updated prior to each fiscal year. (You cannot require firms to update the budget throughout the year).
    Yes
    The next Departmental Budget/Reforecast will become due as provided in the calendar of events and all matters will be designated as "on-budget". If you need to change this setting, you should edit the setting in each matter or use the bulk update capability. You will be able to define email details for this setting in Question 4.3.
    Yes (but no emails/alerts)
    If Departmental Budgeting/Reforecasting is turned on, but budgets will be generated from the law firm budgets, you can turn off email notification and action items alerts for company users. No emails are sent to company users and no action items alerts or other indications for company users in Tracker that the departmental budget is due. Law firm users still receive alerts for law firm budgets.
  7. In the
    Question 4.1
     section, specify how you want to generate your budgets/reforecasts. This setting controls whether the law firm matter budget or the company matter budget is the source budget for Departmental Budget/Reforecasts. This field determines the default setting for new matters.
    More information
    Setting
    Description
    By default, generate the Departmental Budget/Reforecasts using the Law Firm Matter Budgets in each matter.
    Thomson Reuters recommends that law firm matter budgets be made the default budget for Departmental Budgets and Reforecasts for several reasons.
    • The most accurate estimate of what the spending should be is the budget that you have agreed to in the matter.
    • If there are some matters for which a separate, hidden company budget would be appropriate, the matter options for those "exception" matters can be changed so that a separate company budget is provided. (Usually, a separate company matter budget is needed only if you think that the firm has provided too low of a budget, and you want to base the Departmental Budget/Reforecast on a higher amount without the law firm seeing that amount.)
      It will be significantly more work for company users if they have to maintain matter budgets with firms and always enter a separate company budget.
    note
    When the Departmental Budget is activated for the first time and this option was selected as the default, Tracker automatically changes the matter options in all matters to make law firm matter budgets required. For some companies, this could be a significant issue.
    By default, generate the Departmental Budget/Reforecasts by requiring company users to enter a Co. Matter Budget in each matter.
    If the matter group is set up such that Departmental Budgets/Reforecasts are made at the matter group level, then the source budget for the matter group will always be the company matter budget. There are no law firm budgets in matter groups.
    Resolving Issues With the Law Firm Matter Budget Option
    • Option 1 If appropriate, edit the firm profile and change the setting so that the firm is never required to provide budgets. This is not appropriate for all firms, and generally should only be used for small, one-off firms.
    • Option 2 Activate the Departmental Budgeting/Reforecasting module with the law firm matter budgets selected as the default. Immediately after activation, use the bulk update function to change the source of the Departmental Budget/Reforecast to be company matter budgets for selected matters. Next, turn off the law firm requirement in the same matters.
    • Option 3 Activate the Departmental Budgeting/Reforecasting module with company matter budgets selected as the default. Next, have lead company users go into selected matters and change the matter options so that the law firm matter budgets are required and are the source of the Departmental Budget/Reforecast.
      note
      Although it may be possible to use the bulk update tool to change the source of the Departmental Budget/Reforecast to be law firm matter budgets for selected matters, Tracker does not allow this setting to be changed unless the law firm matter budget is already required in the matter.
    Note that even if the Accruals module is not activated in your system, certain types of unbilled amounts are displayed on the Company Financial Review page and can be generated in reports.
  8. In the
    Question 4.2
     section specify how company matter budgets should be entered in a matter. If your company uses the company matter budget in one or more matters, this setting specifies the method by which company budgets are entered.
    More information
    Setting
    Description
    One consolidated budget for all law firms in a matter
    There is one budget for each matter in the system
    Separate budgets for each law firm in a matter
    There is one budget for each firm in a matter
    note
    Budgeting at the matter level is the most efficient approach. Tracker automatically sums up multiple law firm budgets and law firm spending in each matter. Consequently, the company budget-per-matter approach minimizes data entry for your company's users, and does not compromise the quality of budget data or analysis.
  9. In the
    Question 4.3
     section select the months in which you would like to make a reforecast required, or the months in which an email will be sent to users to request review and update of the current budget (if email alerts are enabled). You cannot select the last month of the fiscal year because Tracker does not support entering a reforecast several days before the end of the year. Instead, the final month estimate for spending should be managed using the accrual module.
    The date in the
    Completed On
     column is the date on which company users must accept or enter next year's budgets. The law firm date will actually be earlier. To see the law firm date, click
    Budget calendar of events
    . The format of the date is mm/dd, so 10/13 is October 13.
    More information
    If you answered
    Yes
     in Question 4, two options appear in Question 4.3 in the
    User Request Type
     column. You must decide whether to require an update of all budgets or to send an email requesting users to review the budget and only update if necessary.
    Setting
    Description
    email bdgt review request
    Select this option to send an email requesting users to review the budget. This setting sends an email requesting a budget review, but it does not require users to update the budget. It does not guarantee that users will take an action, but it may be appropriate periodically to supplement other months when an update is required. The email is sent on the law firm input start date to all users (company and law firm), and also on the input reminder date.
    require update of all bdgts
    Select this option to require an update of all budgets. This setting triggers action items alerts and email notices to the responsible users. If a law firm is responsible, they will not be able to post invoices while a reforecast is due. Because of the burden of this selection, Thomson Reuters strongly encourages companies to make this required not more than 3 or 4 times a year.
  10. In the
    Question 4.4
     section specify the month when next year's departmental budget should be generated. The due date for next year's departmental budget is the same as the due date for all budgets in the system. This ensures that all next year's budgets become due at the same time, and that there are not inconsistent due dates.
  11. In the
    Question 5
     section indicate whether you want to activate the Accruals module.When the module is turned on, you have the ability to require law firms and vendors to submit unbilled time. For example, all firms/vendors have a default setting that they are required to submit unbilled amounts, the matters options in all matters cause an accrual to be generated, and the matter group options will specify that the accrual is to be generated at the matter group level, but firms/vendors enter unbilled amounts in the matters.
    Click the
    View audit history of Law Firm Announcement Emails that have been sent
    link to show a list of the accrual emails that have been sent.
  12. In the
    Question 5.1
     section specify when law firms must submit unbilled amounts.
    More information
    Field
    Description
    Before the accrual period ends
    You can specify whether unbilled amounts are due before the accrual period ends or if they can be submitted during the company review period. Because the firm is submitting the unbilled amounts before the end of the month, it must submit two unbilled amounts.
    • The prior month(s) unbilled amount, which is any unbilled amount through the last full calendar month
    • The current month estimated billing, which in the example below is the estimated billing for the month of June
    If you choose this option, you must also decide whether company users should review the unbilled amounts submitted by the firms.
    More information
    For example, assume that unbilled amounts are due on the 20th day of the last month each quarter, and the firm is submitting unbilled amounts in June at the end of the second quarter.
    Enable co. review period - co. review REQUIRED
    Select this option to require company user approval of all firm unbilled amounts.
    If you select this option:
    • Company Review Period The system provides a company review period, which runs from the Co. Input Start Date (which is the day after the LF Input Due Date) and ends on the Co. Input Cutoff Date.
    • Alerts & Workflow Company users will receive an email alert and action items alert on the company input start date, and they should approve or modify the current month estimate provided by the law firm by not later than the company input cutoff date. The accruals will be generated at the end of the day on the company input cutoff date.
    • Company Review Page During the company review period, the law firm unbilled amount will be displayed on the Company Financial Review page. Similar to the invoice pending page, you might think of this as the unbilled amounts pending page.
    • Law firm users will not be able to post invoices during the company review period. The reason is that the law firms will already have entered their unbilled time before the company review period (which should include amounts for any invoices they have not posted as of the company input start date). If firms were able to deliver invoices during the company review period, it would result in double counting (the amount would be in the unbilled amount and in the invoice posted by the firm). If an invoice is held during this company review period, it will automatically be delivered to the company once the company review period ends (if there are no other incomplete tasks that the firm must complete). This does not apply to invoices posted by company users on behalf of firms. Thus, if a company user goes into a matter and posts the invoice for the firm, the invoice will be pending approval immediately, and it will show up in the accrual period ending balance and all reports.
    Why select this option?
    The estimate of the current month is nothing more than a budget. Consequently, many law departments want their company users to review those estimates for the current month to make sure that the law firm is not entering an unreasonably high estimate. (Law firms sometimes pad their accrual estimates so that their invoices appear to be less than expected.)
    Enable co. review period - co. review OPTIONAL (no emails or alerts)
    Select this option to allow company user review of all firm unbilled amounts. Review is optional; no alerts are sent.
    This is the typical selection if you do not want to bother your company users with the review and approval of unbilled amounts. This will give company Tracker Coordinators and other administrators time to review the unbilled amounts entered by the firms, and make any corrections or updates before the accrual period lockdown event.
    More information
    • Company Review Period The system provides a company review period, which runs from the Co. Input Start Date (which is the day after the LF Input Due Date) and ends on the Co. Input Cutoff Date.
    • NO Alerts Company System Administrators and other company users with financial review authority (see Question 2 on the Budget & Accrual Setup page) can review the unbilled amounts posted by law firms. HOWEVER, no emails will be sent and no Action Items alerts will be shown to any company users. Any review must be completed by the Co. Input Cutoff Date.
    • Law firm users will not be able to post invoices during the company review period. The reason is that the law firms will have already entered their unbilled time before the company input start date (which should include amounts for any invoices they have not posted as of the company input start date). If the law firm were able to delivery invoices during the company review period, it would result in double counting (the amount would be in the unbilled amount and in the invoice posted by the firm).
    Disable co. review period (co. admin review during the LF input period)
    Select this option is you do not want company users to approve or input firm unbilled amounts. Unbilled amounts are auto-approved. You should choose this selection only if there is minimal or no review of law firm unbilled amounts.
    If you select this option:
    • There will not be a company review period. Accruals are locked in the system at the end of the day of the law firm input due date, and no further editing is allowed. Thus, with this selection, it is assumed that Company System Administrators are monitoring firm input throughout the law firm input period.
    • There will not be alerts. No emails will be sent and no action items alerts will be shown to any company users.
    After the accrual period ends
    Select this option if unbilled amounts are due after the accrual period ends.
    If you specify that firms enter unbilled amounts after the end of the accrual period (for example, after the end of the month), they will be required to enter a single amount for all unbilled amounts for the month that has just concluded. This is a significantly better approach for your law firms, because they can generate their data directly from their time and billing system. They only have to enter an amount for the Prior Unbilled Amount. In other words,there is no need to separately enter an estimate for the current month.
    For example, assume that the law firm input start date is the first day of the month following the accrual period, and the law firm input due date is the sixth day of the month. Thus, if the law firm is entering unbilled amounts for December, they can start entering such amounts on January 1, and the last day they can enter unbilled amounts is January 6th. Tracker will require them to enter a single amount for any unbilled amounts for time incurred through December 30th.
    If you select this option:
    • There will not be a company review period. Accruals are locked in the system at the end of the day of the law firm input due date, and no further editing is allowed. Thus, with this selection, it is assumed that Company System Administrators are monitoring firm input throughout the law firm input period.
    • There will not be alerts. No emails will be sent, and no action items alerts will be shown to any company users.
  13. In the
    Question 5.2
     section specify how frequently law firms will be required to input unbilled amounts.
    More information
    Field
    Description
    At the end of each fiscal year
    Select this option if you want law firm unbilled amounts to be manually entered at the end of each fiscal year. This selection will notify your firms/vendors to manually enter unbilled amounts only once at the end of the fiscal year. This setting creates the least burden on your firms, yet lets you send materially accurate accruals information to finance every month, with the final accrual entry derived from unbilled amounts manually entered by your firms and vendors.
    How the unbilled amount is obtained each month
    • Months 1-11 The unbilled amount is derived from the budget, or you can choose not to generate accrual data during this month.
    • Month 12 The unbilled amount is manually input by firms/vendors.
    Quarterly
    Law Firm unbilled amounts are entered manually each quarter. This selection will notify your law firms to manually enter unbilled time for the last month of each quarter. This option imposes a more significant burden on your firms. Moreover, at the end of the year all of the data is trued up because the firms will be entering unbilled amounts for the last month.
    How the unbilled amount is obtained each month
    • Months 1-2 The the unbilled amount is derived from the budget, or you can elect not to generate accrual data during this month.
    • Third month The unbilled amount is manually input by firms/vendors.
    • Months 4-5 Unbilled amount derived from budget (or you can elect not to generate accrual data during this month)
    • Sixth month Unbilled amount manually input by firms/vendors
    • Months 7-8 Unbilled amount derived from budget (or you can elect not to generate accrual data during this month)
    • Ninth month Unbilled amount manually input by firms/vendors
    • Months 10-11 Unbilled amount derived from budget (or you can elect not to generate accrual data during this month)
    • Month 12 Unbilled amount manually input by firms/vendors
    Monthly
    Law Firm unbilled amounts must be entered manually each month.
    note
    Requiring law firms to manually enter unbilled time monthly is one of the most burdensome requirements that can be imposed on your law firms, and on your company users.
    Tip | Click the
    Budget calendar of events
     link to view the input cutoff date.
  14. In the
    Question 5.3
     section specify whether Tracker Coordinators will have the ability to make amendments to the law firm's unbilled amounts after the Company Review Period has closed. Select
    Yes
    if you want to allow amendments to unbilled amounts after the input/review period
    More information
    Companies frequently receive amendments to unbilled amounts after the accrual period has been locked down, which results in those companies having to store the amended data in third-party systems such as SharePoint. Enabling this option lets companies ensure that Legal Tracker contains accurate financial data and eliminates the need to use third-party tools. When you enable this option, Tracker Coordinators will see a drop-down option, Last Locked Accruals, on the Pending Unbilled Amounts screen.
  15. On the toolbar, select
    Save & close
    .
Tip | You can click
View a cumulative burden analysis of your budget and accrual selections
 to show the burden imposed on your company users and firm users by your selections on this page.