Can general accounting program like QuickBooks apply complex rate structures and non-traditional fee arrangements to invoices?
Most general accounting and billing programs do not have the ability to apply complex rate structures and non-traditional fee arrangements when creating invoices. Quickbooks, for example, will allow your law firm to set up different billing rates for each employee or for specific matters or tasks, but only in the Professional or Accountant versions of the software. In the lower level Quickbooks programs you can create items for each rate schedule, with sub-items under the schedule for each attorney.
You can use this feature to create [simple_tooltip content=’A flat fee, also referred to as a flat rate or a linear rate refers to a pricing structure that charges a single fixed fee for a service, regardless of usage.’]flat fee[/simple_tooltip] and [simple_tooltip content=’A contingent fee is the fee for services provided where it is payable only if there is a favourable result. Although such a fee may be used in many fields, it is particularly well associated with legal practice.’]contingent fee[/simple_tooltip] items as well.
The difficulty with these general accounting programs is that although they may allow you to indicate which attorney is associated with a specific rate level, these programs do not allow you to assign a rate level to a specific client or to a specific matter.[1] This means that the person making the time entry will need to know which rate level applies to the services being provided and select the proper rate level and the proper attorney in the “item” field. Manually entering the rate level on each time entry increases the likelihood that the wrong rate will be assigned to the task and the client will either be charged too much or too little for the services rendered.[1]
In addition, if your law firm handles matters on a contingency fee or flat fee basis, these programs may require quite a bit of set up in order to track time without a charge or generate information only bills. And, general accounting programs typically do not allow for [simple_tooltip content=’Split billing is the division of a bill for service into two or more parts.’]split billing[/simple_tooltip].[1]
Specialized legal billing programs, however, can be set up to track complex rate schedules:
Further, these programs allow you to and to assign a specific rate schedule to a specific legal matter:
Since general accounting programs cannot tie rate schedules to specific customer jobs, it is not advisable to use general bookkeeping programs in law firms that have complex rate schedules.
