Subscription Fee Arrangements are a type of flat fee arrangement that allows for billing a specific amount every set time period repeatedly.
IMPORTANT NOTE: Time entries do not get pulled onto Subscription Fee Arrangement Bills.
Setting up a Subscription Fee Arrangement
Subscription Fee Arrangements can be set up at the Matter level. Once on a Matter record, select the cog icon, then select Fee Arrangements from the menu to access the Fee Arrangement settings.
Then, create a new Fee Arrangement using the blue add button. Select Subscription from the dropdown. That will pull up all the fields relevant to Subscription Fee Arrangements.
Subscription Fee Arrangement Fields
Planned Effective Date: This is to note the date to make the Fee Arrangement active.
Unallocated Fees Account: This is the assets account used to track the accounting for unallocated and allocated payments.
Amount to Bill: This is the amount desired to bill each time one is generated.
Initial Billing Date: This is the issue date of the first bill and decides the day billing periods begin*.
Billing Period: This is what will set the frequency of billing.
Number of Bills per Allocation Period: When running allocations, this will determine how many bills are grouped in the allocation period (see Allocation Period section below for more details).
Is Taxable: This will set the flat fee line on any bills generated as taxable.
Line Item Description: This will display next to the Fee Arrangement Name on the Fee Arrangement Settings page.
*As a best practice, it's best to set the issue date of all bills to the same day of the month as the Initial Billing Date. For example, if the Initial Billing Date is set to be 11/28/2021, then the next bill would have an Issue Date of MM/28/YYYY.
If the Subscription Fee Arrangement will be used right away, select the green Make Active button once the settings are configured.
Using a Subscription Fee Arrangement
To bill using a Subscription Fee Arrangement, first, make sure entries are marked as Billable. This is important for running allocations later. Then, generate bills and process payment as usual. As mentioned above, a best practice is to set the Issue Date to the same day of the month as the Initial Billing Date. Once the payment is processed, allocations can be run for the Fee Arrangement to make sure the accounting lines up.
Once payment has been processed, allocations can be run for the Fee Arrangement. That is what will allocate funds to the timekeeper(s). To run allocations, go back into the Fee Arrangement settings and click Run Allocations next to the Fee Arrangement. That will bring up a dialog that will allow for setting a Start and End date for the allocation period.
Several factors determine allocations. Once a Start and End date have been set, the system finds any payment distributions for this matter within that date range. It then looks at any bills connected to the payment distributions and their billing entries to determine who to allocate funds to. There may not be billing entries for the allocation period (see below for more details on the Allocation Period). If that's the case, you'll want to create a $0.00 time entry for the timekeeper you want to allocate funds towards.
The End Date set will control what date the allocations show up in the Account Register for the set account.
The entire process used is detailed below:
1. If the Start Date is before the System Closing Date, it's moved to the day after the Closing Date.
2. If the End Date is before the System Closing Date, an error message will be received and no allocations will be created.
3. The system finds all payment distributions dated between the Start and End Date and for each one and determines which allocation period it belongs to (see Allocation Period section below for more details).
4. The system finds all bills paid by the payment distributions and looks at their billing entries. When this happens, the system doesn't take the Issue Date of the bill into consideration.
5. The system then figures out what allocation period each billing entry is a part of.
6. The system calculates what percentage of the allocations each timekeeper should receive for each allocation period. The percentage is calculated by taking the total amount (Billed Rate * Billed Hours) of that timekeeper's entries in comparison to other Timekeepers' within the same allocation period.
7. New allocations are created for each timekeeper for each payment distribution, based on the percentages calculated.
The allocation period is determined by the Subscription Fee Arrangement settings. For example, if the Initial Billing Date is 01/01/2021, the Billing Period is 1 Month, and the Number of Bills per Allocation Period is 3, then any payment to the January, February, or March bills will be included in the first allocation period. Any payment to the April, May, or June bills would then be in the second allocation period, and so on.
Please contact Centerbase Support if there are any questions or issues.