Entering a contingency payment

Question

How do I enter a contingency payment for a client who is also paying for fees and expenses on a monthly basis?

Laurie Lynne · Answer

Here is how we do it at my firm. Expenses are entered normally. All of our time goes in as No Charge (since we don't bill hourly fees for our contingency fee clients). And we bill clients each month, giving them an opportunity to pay their costs as they go, instead of accruing interest on them. 
 Once we get a settlement or award, we put the funds into our Trust Account (i.e., Client Funds in Timeslips), then we go to Accounts Receivables and enter what is called an "Invoice" (from the list which includes Payment, Credit, Write-off, Refund, etc.) for the amount of contingency fees that the firm is charging the client. 
 Later, we transfer those funds from the Trust Account as a payment to the firm, and send whatever amount goes to the client. 
 I hope this helps.

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Entering a contingency payment

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