CHAPTER 11 LEGAL ACCOUNTING MODULE 11.0 OVERVIEW 11.1 REQUIREMENTS AND INSTALLATION Special Requirements

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1 EXTENDED SERVICE OPTIONS CHAPTER OVERVIEW The Legal Accounting Module provides line item tracking of legal expenses incurred during the collection process. You can track expenses incurred by the agency as well as those prepaid by the client. You can instantly tell if you ve received payment from a debtor for a legal expense and whether you have reimbursed the client. Your client statements show the expenses billed and reimbursed, and the Outside Commission and Legal Report reflects the transactions for the period that involve legal costs. The Legal Trust Account Report lists all legal trust account entries, as well as current balances REQUIREMENTS AND INSTALLATION Special Requirements Installation The Legal Accounting Module is designed to run on computers currently running Debt$Net version 6.0 or later. This module requires no additional equipment or special set up procedures. To install the Legal Accounting Module, insert the Legal Accounting Extended Service Option disk into your disk drive and select Install ESO s from the Agency Management Submenu under the Administrative Menu ( Admin ) (Figure 11-1). Copyright 2002 The Computer Manager, Inc. 11-1

2 EXTENDED SERVICE OPTIONS Figure Install Eso s Menu Option. The Select Directory Form displays prompting you to select the drive where the ESO disk is located (Figure 11-2). If the displayed location is incorrect, specify a new location using the Drive drop down list at the bottom of the form. After selecting the correct drive, click the Select button to begin installation. Figure Select Directory Form Copyright 2002 The Computer Manager, Inc.

3 EXTENDED SERVICE OPTIONS 11.2 CLIENT SETUP After the ESO installs, Debt$Net displays a message confirming installation. After selecting OK, exit and re-enter Debt$Net to complete the installation process. Installation of the Legal Accounting Module enables a new field on the ESO s Tab of the Client Inquire/Change Form and creates a new button on the Base Working Screen. The module also adds new menu options under the Client Payments and Adjustments Submenu. To establish that a client will pre-pay legal expenses and to set up the legal trust account, you must flag the Pre-Pay Legals? field in the client file. Do this by selecting Inquire/Change from the Clients Menu (Figure 11-3). Figure Client Inquire/Change Menu Option. When the Client Selection Form displays, select the client you wish to set up for legal accounting by either double clicking on the client record, or highlighting the client and clicking the Select button. The Client Inquire/Change Form displays. Under the ESO s Tab, flag the Pre-Pay Legals? field (Figure 11-4). Flagging this field allows you to charge the client for a legal expense as you enter legal costs against an account. Charging the client is not mandatory however, and Debt$Net tracks both the charges the client is responsible for, as well as agency charges. Copyright 2002 The Computer Manager, Inc. 11-3

4 EXTENDED SERVICE OPTIONS Figure Flagging Pre-Pay Legals? Field ADDING LEGAL COSTS FOR AN ACCOUNT When an account reaches the legal phase of the collection process, you need to track who paid for each expense incurred, whether the debtor paid the expense, and if the client was reimbursed any advanced funds. Enter this information by selecting Inquire/Change under the Account/Debtor Menu (Figure 11-5). Figure Account/Debtor Inquire/Change Menu Option. Select the appropriate debtor to display the Base Working Screen. A new Legals button displays (Figure 11-6) Copyright 2002 The Computer Manager, Inc.

5 EXTENDED SERVICE OPTIONS Figure Legals Button on the Base Working Screen. Highlight the appropriate debtor account and select the Legals button to display the Legal Selection Form, a scrolling list of the legal expenses logged against that account (Figure 11-7). The Legal Selection Form displays the description of the expense ( Description ), the date the expense was incurred ( Date ), the amount of the expense ( Amount ), whether the client paid for the expense ( CLP ), whether the client has been billed for the expense ( CLB ), and whether the client has been reimbursed for the expense ( CLR ). The CLR column updates when debtor transactions against this expense are entered and posted. Copyright 2002 The Computer Manager, Inc. 11-5

6 EXTENDED SERVICE OPTIONS Figure Legal Selection Form. The Total Fees field at the bottom of the form displays the total of all entered expenses for this debtor. The Trust Balance fields contain the current balance of the amount the client pre-paid for legal expenses (first field) and the original amount the client pre-paid (second field). To add a new legal cost to the account, select the Add button to display the Collector Legal Form (Figure 11-8). Figure Collector Legal Form. In the Description field enter a brief description of the expense. In the Date field enter the date the expense was incurred and in the Amount field enter the amount of the expense. Flag the CL Pays field to indicate that the client made a legal trust account pre-payment to cover legal 11-6 Copyright 2002 The Computer Manager, Inc.

7 EXTENDED SERVICE OPTIONS expenses on this account. If the CL Pays field is disabled, the client was not set up to pre-pay legal expenses (Section 11.2). When you finish entering the information, select Save and the expense is added to the Legal Selection Form List. To review or edit an expense already entered, highlight the expense in the list and select the Change button. When the Collector Legal Form displays, edit the appropriate information and select Save to save the changes. When editing expenses already entered, you may not alter the CL Pays field. To delete an expense, highlight it in the list and select the Delete button. A window displays confirming the deletion. To proceed, select Yes. The expense is removed from the list. As you add or modify legal expenses, both the Total Fees window on the bottom of the Legal Selection Form and the Legal Fee field on the Account Maintenance Form are automatically updated to reflect the new total LEGAL TRUST ACCOUNTING After determining that legal action should take place on an account, clients may pay legal costs in advance by placing a fixed amount in legal trust with your agency. Record legal payments by selecting Maintain Legal Trust Account under the Client Payment & Adjustments Submenu of the Clients Menu (Figure 11-9). Figure Maintain Legal Trust Account Menu Option. Copyright 2002 The Computer Manager, Inc. 11-7

8 EXTENDED SERVICE OPTIONS The Client Legal Payments Form appears displaying a list of client prepayments (Figure 11-10). This form displays the client number and name of the client making the pre-payment ( CL Num and Client Name ), the date the payment was made ( Date In ), the name of the debtor on the account ( Debtor Name ), the original amount of the pre-payment ( Amount ), and the current balance of the pre-payment amount ( Balance ). Figure Client Legal Payments Form. To add a new client pre-payment, select the Add button. The Legal Trust Debtor Selection Form displays (Figure 11-11) Copyright 2002 The Computer Manager, Inc.

9 EXTENDED SERVICE OPTIONS Figure Legal Trust Debtor Selection Form. Select the debtor responsible for the account requiring legal action by double clicking the debtor or highlighting the debtor in the list and clicking the Select button. The list is sorted alphabetically by debtor last name, but you may re-sort the list by account number or client reference number by selecting the appropriate radio button. Also, you may use the Extd Srch button to use the extended search feature to locate a debtor (for more information on extended searches, see the Extended Search section under Section 3.3, Inquire/Change, of the Debt$Net 6.0 Users Guide). After you select the debtor, select the appropriate account to display the Legal Trust Form (Figure 11-12). If you select an account belonging to a client not set up for legal expense pre-payments (Section 11.2) a message displays informing you of that fact. Copyright 2002 The Computer Manager, Inc. 11-9

10 EXTENDED SERVICE OPTIONS Figure Legal Trust Form. Enter the date the pre-payment was received in the Date field, and enter the amount of the payment in the Amount field. Select Save to save the entry. Legal fees paid by the client (indicated by a flag in the CL Pays field on the Collector Legal Form) deduct from this balance. To view or edit a pre-payment, highlight the payment on the Client Legal Payment Form and select the Change button. When the Legal Trust Form displays, review or change the necessary information and select Save to save your changes. Select Quit to exit the form without making changes. To delete a pre-payment, highlight the payment on the Client Legal Payment Form and select the Delete button. A window displays confirming the deletion. To proceed with the deletion, select Yes. The payment is removed from the list REPORTING LEGAL EXPENSES Three Debt$Net reports provide information on legal expenses. Client Statements list legal costs being billed to the client, as well as legal expenses being reimbursed. The Outside Commission and Legal Report shows all posted transactions involving outside commissions or legal expenses for the period. Both reports should be printed before closing the statement period. For more information on printing either of these reports, Copyright 2002 The Computer Manager, Inc.

11 EXTENDED SERVICE OPTIONS see Section 7.2, Print Statements Submenu, and Section 7.8.3, Outside Commission and Legal Report, of the Debt$Net 6.0 Users Guide. The third report, the Legal Trust Account Report, accounts for all money in the Legal Trust Account and may be printed by selecting Print Legal Trust Account Report from the Client Payments & Adjustments Submenu under the Clients Menu (Figure 11-13). Figure Print Legal Trust Account Report Menu Option. The Legal Trust Report Form displays (Figure 11-14). Figure Legal Trust Report Form. Enter the starting and ending dates you wish the report to cover in the Legal Trust Entry Start Date and End Date fields. If you wish to print the report for a specific client or account, enter the appropriate number in Copyright 2002 The Computer Manager, Inc

12 EXTENDED SERVICE OPTIONS the Client Number or Account Number fields, otherwise leave them blank to print the report for all clients and accounts. Select Finish to generate the report (Figure 11-15). Figure Legal Trust Account Report Copyright 2002 The Computer Manager, Inc.