Audit & Accounting

Legal Accounting, Invoicing and Cheque Production

This module is both very much real-time and user-friendly. For example, the transaction codes can either be input direct or selected from a list which pops-up on screen. Legal cashiers will appreciate the fact that the posting process is the exact opposite of posting "blind". The operator can see all the various account balances for the file on screen before the posting is started, and is shown what the resulting balances will be before the posting is accepted.

Once the posting is accepted, the client and file balances are immediately updated and, if appropriate, a cheque printed. This feature, linked with the client orientated nature of the database enables on-line warnings to be given if:-

• a transfer is to a different client (for which written authority is required)
• a transaction would put office account into credit
• a payment is being made into office account on a file where there are unallocated disbursements, which could be billed but unpaid professional disbursements

The system maintains running balances which are stored with each transaction for the following accounts:-

• Office
• Client
• Client No.2 (composite deposit or stakeholder account)
• Bank Designated deposit account
• Other Designated deposit accounts

• Unbilled VAT
• Expenses

The system handles expenses as a category distinct from disbursements. Expenses are intended to record items such as travelling and agency expenses, which may or may not be billed as separate items to the client, and if they are billed will always attract VAT. They appear as a transaction on the file, but debit the memorandum expenses balance as opposed to office account, and are posted to the relevant expenses account in the nominal ledger. This has the advantage of making a clear distinction between disbursements and expenses, and allows greater control of both. It also, for example, makes compliance with the Inland Revenue requirement of returning details of travelling expenses paid to individual employees very much simpler. Disbursements are debited from office account in the conventional manner.

Postings direct to the nominal ledger are provided for. Note however that operators do not need access to the nominal ledger itself to carry out the postings which are done entirely through Sovereign LAW. This greatly assists in preserving the security and confidentiality of the nominal ledger.

Postings within a given cost centre do not have to be pre-batched and can be posted in any order, but posting runs are restricted to one 'banking' cost centre. Non-banking cost centres are linked to a banking cost centre, but nevertheless can have their own sequence of printed cheques, thereby allowing branches to print their own cheques.

Posting runs can be sub-divided into batches if preferred, and the batch totals for the various categories of transactions can be viewed on screen. At any time all the postings in the run can be viewed on screen, as can a banking and transfers analysis, as well as the posting slip totals for the run. At the end of the run this information is printed out, together with forms for the bank transfers which have been generated during the run. Details are also kept of when the various runs are actually banked, which greatly assists the reconciliation process.

Cheques can be very easily ticked-off from an on-screen list when they are presented, and a bank statement reconciliation program is provided.

The posting program automatically generates postings to the nominal ledger at the end of each batch posting, together with a detailed audit trail report. This also updates the system VAT table which the nominal ledger uses to display and print VAT details and to produce data for VAT returns.

The invoicing program has been designed on the basis that draft bills will be checked by the accounts department before a VAT invoice is produced. Once the accounts department is satisfied they enter the bill details on the computer, which can immediately print out a VAT invoice. The invoice splits the bill into figures for profit costs, disbursements, expenses, incidentals, and VAT, as well as providing a VAT analysis.

The fee-earner specifies the period which the bill covers, whether the bill is an interim or final bill, whether it is payable immediately or on the client's usual credit terms, by whom it is payable, and also an estimate of any time charge carried forward, viz. the element of the bill which represents time to be spent at a future date on the file. This enables more accurate management information to be provided and is fairer to the fee-earners who work on e.g. conveyancing files after the bill is delivered.

Once a bill is posted, it updates a number of records, including the time, incidentals and fee-earner records and also creates an entry in the system equivalent of the Bills Delivered Book. Payments in respect of Legal Aid reports on case and claims are intended to be posted when payment is received and are handled by a separate program which does not generate VAT invoices as such but prints out an audit trail instead. The program allows the immediate posting of a "Legal Aid transfer" of funds from the Legal Aid nominal account to the relevant file, thereby in most cases avoiding the need to process the file again in a posting run. Subject to the Accounts Rules, the Legal Aid cheque when received may be paid into the Legal Aid nominal account. Sums in respect of unpaid professional disbursements may then, if necessary, be transferred into the relevant client account.

A sophisticated allocation program is part of this module, and allows allocations to be made in respect of Disbursements Not Yet Paid; Disbursements Paid; Expenses; Loans (viz. office to client transfers) and Bills. This enables an appropriate message (such as Overdue Bill) to be displayed when transactions are viewed on screen, and also a useful report of unallocated items to be printed. If a bill is unallocated, it means it has not been paid; if a disbursement is unallocated, it means it has not been billed, and so on.

A suite of programs is provided to enable opening financial balances (including outstanding bills and work in progress) to be transferred through an intermediate database. This can be checked and balanced before the automatic transfer takes place.

Time Recording, Management Information and Billing Guide

This module provides enhanced management information which supplements the information as to the overall profitability of the firm and departments generated by the nominal ledger, and is aimed at providing a summary for each fee-earner, department and matter type and hence work type, of:

• chargeable time including the cost of the time
• time ledger input viz. the value at charge out rates of the time
• the profit costs element of bills delivered
• the time ledger input recovered in the bills delivered
• the total value of bills delivered
• the cash received in respect of bills delivered.

• recording a satisfactory amount of chargeable time
• billing that time at a satisfactory rate, and
• obtaining payment of those bills when due.

The Billing Guide brings together the time records for a file with details of not yet paid disbursements and unbilled disbursements, expenses and incidentals to give a comprehensive guide as to what should be billed. It also gives a summary of the cost of the work being billed.

On the practical level, time records are entered on a daily time sheet and then posted on the computer. The time sheet entry screen reflects the layout of the time sheet itself, so this process is quick and easy. Alternatively there is a special fee-earner facility to enable them to record time automatically “on-screen”. If required, time recording data can be imported from external hand-held computers or scanning devices.

Time is charged in 6 minute units, but can be recorded either in units or minutes, which the computer rounds up to the next unit. Associated with each time record is both the cost and charge of the time recorded. The cost is intended to be ascertained by reference to the fee-earner's annual expense calculated in accordance with the Law Society's formula, divided by a realistic number of chargeable hours per year for the fee-earner to give an hourly expense rate. The method of ascertaining the charge depends on whether the file relates to a private or business matter, or is a Legal Aid case.

For private and business matters, the computer refers to a table of charge rates specified for each fee-earner; for Legal Aid cases it refers to a table of charge rates specified for the activity recorded. This table is, of necessity, quite complex as it contains details of the rates per activity for the various categories of Legal Aid, which in some cases depend on the grade of the fee-earner concerned. 18 activity codes are provided and 16 Legal Aid categories per activity code, with up to 4 grades each. This gives a potential of 1152 Legal Aid charge rates.

Time records for a given file can be sorted, displayed and printed in a number of ways to meet the varying requirements of contentious and non-contentious bills and taxation. They will also, when permitted, be able to form the basis of computer-produced reports on case for Legal Aid purposes. This reflects the substantial support given by the package to Legal Aid practitioners.

Non-chargeable time may be recorded and analysed in up to 5 bands to cover sickness, holiday, training etc. Time may also be recorded against a file but with a nil charge rate, in which case the cost of the time is attributed to the file.

Reports

Sovereign LAW provides a number of reports, which have been carefully designed to provide meaningful information, rather than just producing voluminous listings. A selection of report designs for the Report Generator are also provided. These can be readily customised by users, who can alternatively design and produce their own reports to meet specific requirements.

Further analysis and projections or specialised reports can be obtained by use of the Sage Report Generator or using the modern method of linking with other office products such as Microsoft Excel or the Windows-based Crystal Report Writer.

Deposit Interest Calculator and Compliance Check

This is a flexible and easy to use module which permits calculation of deposit interest on either a manual or semi-automatic basis, coupled with the printing of a gross interest certificate to be given to the client. Gross interest payments are totalled for the client during the tax year, at the end of which a list is printed out to accompany the necessary return to the Inland Revenue.

The compliance check runs through the transactions on a file looking for circumstances where the Deposit Interest rules indicate interest should be paid to a client. A report is also available which scans all open files looking for those where it appears a detailed compliance check should be carried out.