Types of Invoices
Billing with Lexolution allows you flexible billing options, whether based on time tracking, RVG, or a flat rate. You can create a draft invoice and record potential invoice items at any time. Until the final invoice is created by completing the draft, you can make corrections and comparisons. For example, within a draft invoice, you can record both an RVG invoice and a time-based invoice to compare them.
You also have the option to create collective invoices, split invoices, advance invoices, and cumulative invoices. Advance invoices can be created as flat-rate invoices and RVG invoices.
Time Allocation
Timely recording of all hours ensures complete invoicing. The recorded hours can be assigned and evaluated in the current invoice draft.
Even for RVG and flat-rate invoices, assigning the recorded hours is highly recommended. Only by assigning the expenses to the specific invoice can you conduct an economic analysis of the client relationship and calculate the effective hourly rate for a case.
Invoice Items
In the invoice items view, you get an overview of the items you are billing. You have the option to add more invoice items. A more detailed description can be found in the next chapter Invoice Drafts.
General Revenue Distribution
Lexolution automatically distributes the expected revenue from invoicing to the attorneys. For multiple attorneys, the distribution considers the attorneys proportionally based on their performance, i.e., the hours recorded on the case in connection with the stored hourly rate. Therefore, it is recommended to add the hours to the invoice even for RVG invoices. If no hours are assigned to an RVG invoice or a flat-rate invoice, the revenue is distributed to the lead attorney.
The revenue distribution can be customized in the invoice draft, the invoice, and later in the payment recording for the invoice. You can add a new employee to your revenue distribution key using the buttons Revenue Distribution > Employee to Case. The employee is then automatically entered as the responsible employee for the case.
Generally, the revenue is first distributed to tax-free expenses, then to expenses, and finally to the fee upon payment recording.
The distribution ratio can be configured firm-wide to differ from the above description, distributing not based on performance but on the standard hourly rate of the involved employees. This setting can be activated under Administration > System Administration > General Settings.
Revenue Distribution for Advance Invoices
Under Administration > System Administration > General Settings, you can configure how the credited advances are distributed during allocation. The following options are available:
- Ratio of revenue distribution of the performance invoice (default)
- Ratio of revenue distribution of received advances
Since this determines the distribution ratio of the advance allocation to a performance invoice, there is no difference when such an invoice is fully paid.
The tabs After Allocation, Rebooking Total, Rebooking Vert., Rebooking Tax, Rebooking Over and After Rebooking show the automatic distribution of the allocation and the resulting rebooking. This display serves to enhance the transparency of the allocation.
For a more detailed description of revenue distribution concerning advances, please refer to the document Advance Invoice Handout. The document is available in the KMS download area of STP AG.
Automatically Exclude from Revenue Distribution
You have the option to exclude employees with a certain status from revenue distribution. You can configure this under Administration > Professional Administration (General) > List Entries > Employee Status in the Exclude from Revenue Distribution column.
If an employee with a status excluded from revenue distribution bills hours, the revenue is automatically redistributed from them to the case's lead attorney. Manual redistribution remains possible afterward.
If you do not wish to use this firm-wide setting (excluding an employee status from revenue distribution) in certain cases, you can deactivate it in the case billing info using the checkbox Ignore Employee Status in Revenue Distribution.
Invoice Language
Each invoice is assigned a language. The descriptions of the types of services for the added hour items are automatically translated into the chosen case language. This makes it easier for you to create invoices in foreign languages.
Concept of the Invoice Draft
By using invoice drafts, invoices can be prepared in advance of the final billing, allowing for corrections or considerations. At the time of the invoice draft, only a draft number is assigned, e.g., E-360. The draft can be created and printed as a document. Only by completing the invoice draft are the final invoice and the invoice document, including the invoice number, created and stored in the system.
Hours incurred should always be assigned to an invoice to enable fair revenue distribution based on performance and provide a solid data foundation for controlling.
Profit Distribution
After the invoice is created, it is finalized, providing a controlling-capable invoice. Additionally, the later booking of the payment receipt on the invoice results in an exact distribution of the revenue according to the parameters set in the invoice. In Lexolution, you can determine the base data and build your firm's distribution system on it. The individual calculations can be represented in Excel, and Lexolution provides the data for this. By automatically reconciling the recorded hours with the invoice, the internal effort or success within a case can be particularly tracked.
Overview of the Invoice Draft
Using the button
Reports > Draft Invoice Report, you can access a detailed report on the selected draft invoice, including information about the associated file with outstanding items, received advances, already completed billings, and billable services (hours and expenses). The report always reflects the current status. There's no need to generate the evaluation database beforehand.
Service Overview for Invoice
In invoices and draft invoices, you can access a report via the button
Invoice Info > Reports > Service Overview that presents the net fee in relation to the hours worked and billed, as well as the employee hourly rates recorded.
The top section of the service overview contains a summary of the individual amounts.
The value "Revenue Difference" informs you whether the potential net fee is in an economically balanced relationship with the services provided.
In the "Fees from Time Expenditure" table, you have access to the calculated values "effective hourly rate" and "achieved hourly rate," as well as the "revenue difference per position."
The effective rate considers the internal (actual) services recorded in the draft invoice and relates them to the net fee. The achieved rate refers to the externally billable (scheduled) hours in relation to the net fee. The determination of the net fee is always based on the current invoice hourly rate, so the service overview is also available in a secondary currency, but the report is generated in euros. The revenue difference per position is calculated from the effective rate minus the employee's standard rate times the hours worked.
If you standardize an hourly invoice, the effects on the effective and achieved rate are directly visible. The report values are determined from live data. Updating the evaluation database is not necessary. Each activity description is fully represented. In the lower tables, all values are further prepared by summing per employee, employee status, and achieved rate.
Service Overview for File
Using the button
Reports > Service Overview for File, the dialog Service Overview for File of the associated file opens. The dialog provides an overview of the status of a file's services from recorded and not billed to paid. You can also access this dialog directly in the file view in the Quick Info Services via the link To Service Overview.
Billing Info for Invoice
In addition to the draft invoice or the invoice, you can store a Word document as a system template and create it using the button
Invoice Info > Reports > Billing Info. This way, you get additional information about the draft invoice or the invoice, such as the revenue distribution of the attorneys. Under
Invoice Info > Reports > Billing Info, the template type Billing Info is available.
Generate Hierarchical Collective Invoice / Partial Invoices
You have the option to generate hierarchical collective invoices using the Invoice Runs function. Partial invoices are created automatically. Please read the chapter on Invoice Runs for more information.
Edit Partial Invoices
The created collective invoices are displayed in the draft view. In the main list of draft invoices, you can see all partial invoices as well as the collective invoice and filter them using the column Collective Invoice in combination with the list filter. A partial invoice is assigned to the collective invoice in the list of draft invoices via the column Collective Invoice.
If you select a collective invoice, you can jump to the assigned partial invoices using the context menu to edit them separately. If necessary, you can remove a partial invoice from the collective invoice draft or bill it separately. When removing a partial invoice from the collective invoice, you can choose whether to just detach the partial invoice from the collective invoice or to completely delete the partial invoice draft. You can also change the revenue distribution key in the individual partial invoices.
If you choose the "Delete All" option, you will be reminded for security reasons that a certain number of partial invoices will also be deleted.
Standardize Partial Invoices
After creating a collective invoice, you can standardize it using the button
Actions > Collective Invoice > Standardize Partial Invoices to create a flat-rate collective billing.
Enter the flat rate to be distributed as a net amount and provide a description of the flat rate. The description is needed for displaying the flat fee in the text markers.
The flat rate is automatically distributed by Lexolution in proportion to the fees of the partial invoices. The fee of the partial invoice is derived from the billable hours times the hourly rate of the respective attorneys.
Then you need to choose one of the following calculation options regarding the expenses:
- Expenses are billed with the flat rate: For all invoices with the invoice type "Flat Rate Invoice," the invoice item "Expenses" or "Expenses according to RVG" is removed from the invoice. The expenses remain on the invoice. The entered fee amount is used unchanged for distribution.
- Expenses reduce the flat rate: For all invoices with the invoice type "Flat Rate Invoice," the sum of the invoice item "Expenses" or "Expenses according to RVG" is formed. This is subtracted from the flat rate. The result is distributed if it is positive.
- Expenses are billed separately: The expenses of the partial invoices are billed in addition to the calculated flat fee. The expenses are not changed.
Reset to Hours
You can undo the standardization of the partial invoices using the button
Actions > Collective Invoice > Reset to Hours by resetting the standardized partial invoices to hourly invoices.
Free Collective Invoice
You have the option to create a free collective invoice using the Invoice Runs function. Please read the chapter on Invoice Runs for more information.
Manual Collective Invoice
You have the option to manually add existing draft invoices to a collective invoice as partial invoices. To do this, create or select a collective invoice and then click the button
Actions > Collective Invoice > Add Partial Invoices to add the available partial invoices.
In the Add Partial Invoices dialog, the draft invoices are displayed with the following filters:
- that are not cumulative invoices,
- that are not cumulative origins,
- that are not split,
- that are not split invoices,
- where the user has at least write access to the file,
- where 'Is in secondary currency' and the ISO code of the currency match that of the collective invoice,
- that are not already a partial invoice of a collective invoice,
- where the invoice type in the billing configuration is not 'Partial invoice',
- where the file is a sub-file in a file hierarchy.
If cross-instance cost determination requests are created, the invoice purpose must also be 'Cost determination request (Individual)'.
Adjust Tax Amount
In collective invoices, rounding differences can occur if the net amounts of the collective invoices * the tax rates do not exactly match the sum of all tax amounts of the partial invoices. The tax amount can be adjusted in these cases using the button "Collective Invoice > Adjust Tax Amount".
Reset Tax Amount Adjustment
The adjustment of the tax amount in collective invoices can be undone using the button "Collective Invoice > Reset Tax Amount Adjustment".
Cumulative Invoice
You have the option to accumulate invoices, for example, for construction law mandates where individual construction phases are billed over a long period. The client always receives an invoice for all service items incurred so far, minus the amounts already paid. Additional text markers for expense items can optionally display only the currently incurred expenses in the invoice document. Technically, the invoice is canceled, thus releasing the items and expenses again. These can be added to the newly created invoice draft.
Advance and Final Invoice
In Lexolution, you can create a flat-rate invoice and an RVG invoice as an advance invoice. Paid advance invoices can be credited to service invoices.
Split Invoice
You can split an invoice draft into multiple drafts to distribute and send the invoice to different recipients.
Complete the invoice draft before splitting it into individual invoice drafts. New invoice drafts are generated using the Split button. By default, the fee, expenses, and tax-free expenses are split equally. However, you can manually change the distribution by editing the percentage distribution or changing the amounts. The generated invoice drafts are flat-rate invoices. They contain a flat-rate item for the fee portion and a flat-rate expense item for the expense portion. The split individual invoices refer to their split original invoice in the Split Inv. column. This allows related processes to be quickly filtered. The individual invoice drafts can be assigned to the invoice recipient and finalized. The open item debtor and payments then refer to the individual invoices.
The now split original invoice draft must be finalized with a flat-rate item of 0.00 EUR and the invoice type flat-rate. If the expense amount is greater than 0, the expense item must be deleted.
If there are tax-free expenses, you must mark the tax-free expense with the checkbox Do not bill expenses (Invoice Draft > Expenses button > Edit item). This ensures that the efforts of the file are appropriately considered in controlling and that the amounts are not double-counted as billable. You should not delete the original invoice under any circumstances.
Split invoice expenses are directly linked to the associated split invoice. It is prevented that expenses of a split are deleted and new expenses are added. The expenses are automatically deleted when the associated split invoice is deleted.
Service Billing
You can bill services exchanged with a location of your firm abroad. The Service Billing function of the invoice drafts in the Actions ribbon under Generate Invoices allows you to automatically determine the services provided between locations per month and create a flat-rate invoice draft for the total. The services that have already been billed in the selected month are determined. The check goes to the completed invoices of the location. You can decide whether to consider expenses and tax-free expenses in the billing. The service billing is always conducted for a period of one month. If you conduct a service billing in the middle of the month and again at the end of the month, the already conducted and completed service billing invoices of the month are deducted. When calculating the amounts to be billed for fees, expenses, and tax-free expenses between locations, advance invoices are excluded.
Invoice Draft in Secondary Currency
To create an invoice in a secondary currency, you must select a secondary currency and the appropriate culture in the billing information for the file. Then record the travel and travel cost amount in the secondary currency and record the hourly rate for the attorneys of the file in the secondary currency using the Hourly Rates button. Now times and expenses can be recorded in the secondary currency. Please note: Setting up a secondary currency in the billing information does not affect hours and expenses already recorded or invoice drafts.
When recording activities, the secondary currency amount and the Euro amount are not visible. When recording expenses, an additional field Expense in Secondary Currency appears where you can enter the expense amount in the secondary currency.
When creating the invoice draft, you must check the Secondary Currency checkbox before clicking Next and after clicking Next, enter a conversion factor and the culture in detail. The conversion factor is used to convert the secondary currency amounts back to Euros. Revenue distribution, invoicing, and management of open items are conducted in Euros.
When adding hours and expenses, you can only include hours and expenses recorded in the secondary currency. This is displayed in the add dialog. The amounts of the items are shown in the secondary currency. The quick info also shows the amounts of the invoice in the selected secondary currency. The revenue distribution shows the amounts in Euros.
Invoices in secondary currency are not possible for cumulative invoices, RVG invoices, cost determination requests, and hourly invoices with the option "Expenses according to RVG".
Collective Invoices in Secondary Currency
You can create collective invoices in a secondary currency using the Invoice Runs function. Please read the chapter on Invoice Runs for more information.
Invoices in Secondary Currency
Credits, cancellations, and changes to revenue distribution are made in euros. The Currency Loss function creates an entry for the remaining outstanding amount of the invoice in the currency loss account configured under Professional Administration (Accounting) > Account Functions.
Revenue Distribution
For each invoice, a revenue distribution key is automatically generated based on services. Hours and expenses are always assigned to an attorney. From this, a distribution key for the total invoice amount is calculated. The prerequisite is that you assign the attorneys' hours to the invoice. Each attorney receives a percentage share according to their hours worked multiplied by their hourly rate. Every (partial) payment on an invoice is distributed among the involved attorneys according to the distribution key.
If you create an RVG or flat-rate invoice and do not assign the hours of the attorneys involved in the case, the revenue will be distributed to the attorney primarily responsible for the case.
Tax-free expenses are distributed first, taxable expenses second, and fees third. Only when one category is fully covered will the next category be distributed. If a partial amount is insufficient to fully cover a category, it will be proportionally distributed among the involved attorneys within that category based on the resulting ratio.
The distribution automation can be changed by generally excluding certain employee statuses from automatic revenue distribution. Please read more above under Automatically Exclude Revenue Distribution.
This distribution logic can be individually modified.
You can add another employee to the revenue distribution key using the Add Employee to Case button. Since this employee must also be linked as an employee to the associated case, it is necessary to also enter the case responsibility.
Revenue Distribution Calculator
You can access a calculation tool for manual revenue distribution using the Distribution Calculator button.
Here, you can redistribute revenue percentages. To do this, click in the From Employee box for the employee from whom revenue should be redistributed. Then enter the percentage in the New Percentage column that the corresponding employee should receive from the other employee's revenue share. Then click the Share button. Lexolution will calculate the percentage shares for you. You can perform this process multiple times in succession to distribute the revenue step by step. By clicking the Apply button, the new values are adopted into the manual revenue distribution.
Revenue Distribution Advance Invoice
The distribution of revenue from advance invoices works the same way as with a service invoice. The distribution ratio of fees, when these advances are offset against service invoices, can be configured. By default, the distribution ratio of the service invoice also applies to the offset advance. Under System Administration > General Settings, this distribution can be changed to the distribution ratio of the received advances.
The distinction only applies until the service invoice is fully paid.
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