There are three ways to bill clients in Centerbase: Hourly, where bills are based on the time entries made for that matter; Project, where the client is billed a set amount for the completion of a project and time entries are only used for allocation of payments to the timekeepers; and Subscription, where the client is billed a flat amount every period and time entries are only used for allocations. All matters are created with an hourly fee arrangement. You can change the fee arrangement in the matter > Gear icon > Fee Arrangement. You can only have one fee arrangement active at a time for a given matter.
You can add a fee arrangement without changing the matter as fee arrangements have to be made active before they take effect.
Note: Throughout this article, and the other articles on fee arrangements, we will often refer to project and subscription fee arrangements as flat fee billing. However, the older method for flat fee billing is still available, as such the matter detail field “Fee Arrangement” has a value “Flat Fee” that is still an hourly fee arrangement. The old method for Flat Fee Billing of using Bill Actions > Manage Flat Rate is still available.
Hourly Fee Arrangements
This is the default arrangement and was the only arrangement in Centerbase until December 2019 with the 7.13 release. Under Hourly arrangements bills will be made based on time entries that have been entered before the bill was generated and allocations are made as payments are received for the bills. While this is the default arrangement you can still add a new hourly arrangement to take over after a project is done.
Flat Fee Arrangements
Project and Subscription fee arrangements are both flat fee arrangements and thus share a few traits.
- Bills are generated before time entries are made.
- Neither will have time entries on the bill’s themselves as they are billed for services rendered not time worked.
- Billable Expenses will still be added to the next bill generated for the matter.
- Time Entries have no effect on the billing of flat-fee arrangements, they are only used for allocating the payments after the work is completed.
- Time Entries will not be marked as billed since they are not on a bill. They will not show as WIP on the matter since they are not billable. [See Fee Arrangement Allocations for more on how allocations work].
- Allocations have to be run at the end of the project and are not created with payment distributions.
Project Fee Arrangements
Projects Fee Arrangements are for billing a flat fee for doing a specific task. You can split the charge over several bills. When you generate bills projects with an outstanding balance will generate a bill for Remaining Amount / Remaining Number of Bills plus any billable expenses made within the billing time frame.
To add a project press the “Add” button and select “Project” for Category. Fill out the information below, fields marked with a “*” are required.
Dialog Fields:
Category*: This is the Fee Arrangement type
Planned Effective Date: This is to note when you are planning to make this arrangement active
Unallocated Fees Account*: This is the asset account that will be used to track the accounting of unallocated and allocated payments. [See Fee Arrangement Allocations for more info]
Amount to Bill*: The Amount to bill for the whole project
Number of Bills*: (Must be a positive Integer) The number of bills to spilt the amount over. When generating a new bill the system will divide the remaining unbilled amount by the remaining number of bills to get the amount for the bill.
Is Taxable: Sets the flat fee line on the bills as taxable.
Line item Description: a short description that will display with this project on the fee arrangement settings page.
Subscription Fee Arrangements:
Subscription Fee Arrangements are for Clients who are on retainer and are billed a flat amount regularly. You set when to start billing and how often to bill then the bills will generate with an issue date for the start date and each interval thereafter.
To add a subscription fee arrangement press the “Add” button, select “Subscription” from the category drop down and enter the information below. Fields marked with a “*” are required.
Category*: This is the Fee Arrangement type
Planned Effective Date: This is to note when you are planning to make this arrangement active
Unallocated Fees Account*: This is the asset account that will be used to track the accounting of unallocated and allocated payments. [See Fee Arrangement Allocations for more info]
Amount to Bill*: The amount of each bill
Initial Billing Date*: Issue Date of the first bill and the start of the billing periods
Billing Period*: (Must be a positive integer) the frequency of billing. You have an integer and a choice of day(s), week(s), month(s), quarter(s), or year(s).
Number of Bills Per Allocation Period*: (Must be a positive integer) when running allocations how many bills do you want to group for allocations. This allows you to bill monthly but allocate based on work done each quarter.
Is Taxable: Sets the flat fee line on the bills as taxable.
Line item Description: a short description that will display with this project on the fee arrangement settings page.
Making an Arrangement Active
Once you have created the arrangement that you want you need to make it active. To do this simply press the “Make Active” button on the arrangement that you built. You will be prompted to enter a start date for the arrangement. This will set the effective start date for this fee arrangement and set the effective end date of the previously active fee arrangement. How billing entries are treated is dependent on what fee arrangement is effective for their entry date.
You will also be prompted if there is an unbilled amount from the active fee arrangement and given the option to cancel so you can bill that amount or to continue. If you continue without billing the remainder you will not be able to bill that amount later.
If you click make active on a fee arrangement with an effective end date it will not reactivate the old arrangement but instead start a new one with the same settings. There is one exception to this for if you make an arrangement active by mistake, wrong arrangement or wrong start date, it is possible to revert to the previous fee arrangement. Select the last active arrangement and set its start date to its original start date. This will revert the active fee arrangement to the previous one. The system will throw an error if there are any bills that were generated under the new arrangement.
You cannot make a new Fee Arrangement active if the current Active Fee Arrangement has generated a bill after the new ‘Effective Date’
SPECIAL CASE: When making a Fee Arrangement active, if there are Time Entries that have been allocated to after the new effective date, a warning will be shown. If the user wishes to continue, those Time Entries will no longer be allocated, and the previously active Fee Arrangement will have its allocations run for its duration.
Running Allocations
Unlike Hourly arrangements that automatically allocate fees to timekeepers as payments are made, flat-fee arrangements must click a button to run their allocations. The simple reason for this is that you could receive payment for a project before all work is complete.
To do this click the Run Allocations button for the fee arrangement that you want to run allocations for. A dialog box will open asking for a start and end date for the period to run the allocations over. The system looks for payments made during this time frame and allocates the amounts based on timekeepers and, for subscriptions, the allocations periods.
For more information on Flat Fee Allocations see [Flat Fee Arrangement Allocations]
Navigation Paths:
Fee Arrangements Settings: Matter > Gear Icon > Fee Arrangement
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