Fees Received VS Fee Income

One very important piece of information for a law firm is their Total Amount of Fees Received. That is, of the payments coming in for bills, how much of it was for Legal Fees (vs expense recovery, interest, taxes, etc.) Many things such as compensation are based off of this.

On the billing side, Centerbase has various metrics / reports that talk about Fees Received, including (but not limited to)

• Fee Total on Payment Distributions
• Fee Receipts Report
• Production and Origination Reports
• Timekeeper Analysis

On the accounting side, Centerbase also allows the firm to hook up one or more Income accounts to reflect fees received. This can be done (depending on your settings) at the system level, client level, matter level, or in some cases the billing code level.

Many times, the “Fees Received” on the billing side match up to the “Fee Income” on the accounting side, but there are several things that can cause the two to diverge:

Journal Entries

Whether these are entered by the firm or imported from a previous system, Journal Entries that affect Fee Income in accounting ONLY affect accounting. There may or may not be payments received on the billing side that correspond to this, or the Journal Entry may be moving Fee Income between different accounts, but either way these will only affect the accounting side and is a big reason why the two might not match.

Trust Payments that are transferred on a different date than when received

In Centerbase, when you make a payment from trust, the date on the payment is when the Fees Received will be reflected on the billing side. However, Fee Income will not be updated until you make a Trust Bank Transfer to move the funds from your Trust Bank account to your Operating Account. So if you made a trust payment and dated it 12/31/2024, then you didn’t transfer it until 1/1/2025, this would cause your fees received VS fee income to not match up not just for December, but for 2024 and 2025 in general.

Trust Payment that was never transferred and was later reversed

Similar to the trust details mentioned above, if a trust payment is NEVER transferred, and then reversed on a later date, it will have a similar effect as the Trust Bank Transfer on a different date. So if you made a trust payment and dated it 12/31/2024, then reversed it on 1/1/2025, your fees received would go up in December, then down again in January, but your Fee Income would not have changed at all.

Payments Received before Accounting Commencement Date

In order to make sure imported payments do not “double dip” with imported accounting/general ledger data, Implementations will set an “Accounting Commencement Date”. Any billing/trust/accounts payable information in the system dated before that date will NOT affect anything in accounting. If a firm tries to back-date a payment to before that date, the system will warn them that this data will not affect your general ledger.

Other

• Trust Bank Transfers that were reversed, then recreated
• Overall Positive Bills with some negative entries
• Default Hard Cost issue