Accruals play a crucial role in the financial management of corporate legal departments, providing a reliable mechanism for tracking and estimating legal expenses and obligations. In the context of Spend Management in AdvoLogix, accruals enable legal teams to effectively manage their budgets, forecast costs, and maintain accurate financial records.
This article aims to provide a comprehensive overview of the use of accruals within corporate legal departments, highlighting their significance in the Spend Management application, and outlining best practices for implementation and utilization. By understanding the power of accruals in AdvoLogix, legal professionals can optimize their financial processes, enhance decision-making, and ensure greater transparency in managing legal expenses.
Setting up an Accrual on a Matter
The Accruals Details section is seen on the AdvoLogixSM Matter Record Page layout on the Financials tab (as seen below).
Existing Spend Management customers will need to manually add the three fields and related list.
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Submission Due Date - The day of the month which accrual submissions are due. This also determines the accrual’s start and end date. If the submission due date is the 25th, the accrual’s start and end date is from the 25th of the current month to the 25th of the following month.
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Submission Window (days) - The number of days before the submission due date that accruals can be submitted. This field can also be used to set up automated reminders to your vendors to submit accruals. Reminders coming soon.
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Submission Period - Choose whether accruals are due quarterly or monthly. This also determines the accrual's start and end date. If monthly, the accrual period will be one month (25th of one month to 25th of the next month). If quarterly, the accrual period will be 3 months. (from the 25th of one month to the 25th of the 3rd month after).
- Accruals Related List - Once you have saved this section, any new accruals associated with the matter will show the start and end dates and submission periods in accordance to the Accrual Details on the matter.
The image above shows where the data comes from on the accrual record to the matter.
- Start Date & End Date = Submission Due Date
- Period = Submission Period
Adding New Accruals
- Matter - Enter the matter associated with the accrual.
- Vendor Account - Enter the account associated with the accrual.
- Amount - Enter the total amount estimated or unbilled for the period of time for the matter.
- Month - Enter the month the accrual is submitted for. If the accrual is submitted quarterly, enter the first month of the quarter this accrual is submitted for. The system will calculate the end date if the matter’s submission period is set to quarterly.
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Type -Select whether the accrual for this month is for estimated time or unbilled time.
- Estimate - Expenses and fees which have been billed but not invoiced.
- Unbilled - Expenses and fees which have not yet been billed.
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Start Date - Calculated from the Submission Period and Submission Due Date on the matter and the Month and Year of the accrual.
For example: If the Submission Period on the matter is monthly, the Submission Due Date on the matter 1, and the month and year of the accrual is May and 2023, the Start Date will be 5/1/2023 and the End Date will be 6/1/2023.
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End Date - Calculated from the Submission Period and Submission Due Date on the matter and the month and year of the accrual.
For example: If the Submission Period on the matter is monthly, the Submission Due Date on the matter 1, and the month and year of the accrual is May and 2023, the Start Date will be 5/1/2023 and the End Date will be 6/1/2023.
- Status - Defaults to Open status. To utilize this field, as part of an approvals process, you will need to set up an approval process that routes to the user name in the approver field and which ultimately manages and updates the status field on an accrual within the accrual process.
- Approver - If approval processes are set up in your org, designate an approver for this accrual.
- Year - Enter the year the accrual is submitted for.
- Period - Calculated from the Submission Period field on the matter.
Accruals in the Digital Experience
AdvoLogix provides the ability for the outside counsel to submit accruals for their matters through our legal service provider portal. Your outside counsel will be able to submit unbilled and expected accruals for their matters for specific months or quarters based on your organizations requirements for accrual submission.
An administrator will need to add the Accruals Easy Add lightning component and Accruals Record List to a page within the digital experience using builder. The image below is a representation of what the accruals page could look like.
Adding Accruals from the Digital Experience
Use the Accruals Easy Add lightning component within your digital experience. This component is available to be used anywhere within your digital experience.
- Matter - Enter the matter associated with the accrual.
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Month - Enter the month the accrual is submitted for.
If the accrual is submitted quarterly, enter the first month of the quarter this accrual is submitted for. The system will calculate the end date if the matter’s submission period is set to quarterly. - Year - Enter the year the accrual is submitted for.
- Amount - Enter the total amount estimated or unbilled for the period of time for the matter.
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Type - Select whether the accrual for this month is for estimated time or unbilled time.
- Estimate - Expenses and fees which have been billed but not invoiced.
- Unbilled - Expenses and fees which have not yet been billed.
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Add - Submit each entry by clicking on this button.
- Download Import Template - Download the import template to enter multiple accrual submissions. This will generate a CSV file with some sample data and remove the sample data and enter your own before uploading to AdvoLogix. You can include multiple matters in a single CSV file.
- Import - Upload multiple accrual submissions by uploading the import template using the Import button.
The Vendor Account field on the accrual record will automatically populate with the account associated with the community member submitting the accrual.
Approval Processes for Accruals
You can set up your own approval processes for accruals. There is a field on the accrual submission screen where you can designate an 'approver'. To utilize this field, you will need to set up a Salesforce approval process that routes to the user's name in this field and which ultimately manages and updates the status field on an accrual within the accrual process.
Accessing Accrual Reports & Dashboards
We ship with a couple of accrual reports and dashboards which can be found in their respective Spend Management folders