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Overpayment in one of multiple matters, underpayment in others, equals zero

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Posts 38
Joseph Nierenberg Posted: Thu, Mar 4 2010 1:13 PM

I cannot figure out how to deal with this so that there are no balances remaining the client's several matters:

1.  Client has three matters, which are invoiced in a consolidated billing.

2.  Client paid a retainer, which for case-related reasons and consistent with the material ethics sections, I applied upon receipt to the larger of the three matters instead of my normal practice of depositing into a trust fund pending the billing process.

3.  When we prepared invoices, there was an overpayment on that matter as a result of the retainer.  In other words, the retainer was 142.50 greater than the actual fees, so the invoice's balance due came out as $-142.50.  There were fees due on the other two matters.

4.  Client paid the amount appearing as a total under the Balance Due column of the consolidated summary.  We applied the payment to the two matters having balances.

5.  Now, there is a balance still due on one of the matters; a negative balance still being carried on another of the matters; and the total balance due is -0-.

While this problem is unusual, because we didn't deposit the retainer in the pooled client trust fund, it is nevertheless likely to recur.  What can I do so that all accounts have zero balances?  While the client's bill would be correct as it stands now, TM will not let me archive the matters until there are zero balances.

Joseph Nierenberg
Nierenberg Employment Law, PLLC
Consulting – Litigation – Training
Minneapolis, Minnesota

Top 10 Contributor
Posts 452

You can create a billing item with a description that says that you are offsetting the retainer. Then generate an invoice which will zero out the balance. Print the invoice and keep in your files just don't send it to the customer. Deepa

Deepa Patel Halak Consulting LLC.2002 Alameda Ave, Suite  2 Alameda, CA 94501 PH - 415-233-4240

Top 75 Contributor
Posts 41
Jwyatt replied on Fri, Mar 5 2010 8:17 AM

I haven't worked with consolidated billings but we sometimes have to use a workaround for situations where a client pays many matters but short pays one.  In that case you cannot choose "pay multiple matters" when applying the check because to use that process there must not be any remainder.  In those cases we apply the check in two steps.  The first step we write it up as if the check amount were the amount necessary to clear all the matters except the one for which they made a deduction on (we make a note in the comments section about the true total on the check).  We then process the remainder of the check as a sinlge payment which is allowed to "short pay" an invoice.

Perhaps, in the future, some variation of this can be used by you to avoid the credit balance on the initial account.  Write the single check up as a smaller amount and apply it to the first matter then write the remainder up as a payment for the second matter.  This assumes you know in advance how much the bill will be.

Alternatively, we have chosen "Refund" from the account with the credit balance which takes you to the check writing screen.  Make the check out to your firm.  Then move to the matter that has the 142.50 owing and apply the check made out to yourself to this balance.

Jeff Wyatt
Abilene TX

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