FAQ: What does a disbursement's Client Balance mean?

This article applies when:

• You are on the Matter's Disbursement tab.
• You notice the Client Balance column displaying a value.

Explanation

When you bill an anticipated disbursement, it records a Credit ledger entry against the disbursement.

When you link it to a creditor by recording a purchase or directly pay it by recording a payment, a Debit ledger entry is recorded against the disbursement.

The Client Balance is calculated as Debits subtracted by Credits associated with the disbursement.

Key Considerations About Client Balance

• It is not directly related to whether or not your client has paid the firm. Payment status is reflected by the invoice balance, not the disbursement’s client balance. Once the disbursement is billed, the amount owing shifts to debtors, meaning the client no longer owes the disbursement but instead owes the invoice.

• Client Balance does not necessarily indicate payment to the supplier. If a disbursement is linked to a Purchase, a Debit ledger entry will be created, but the creditor may still be unpaid. The Payment status will only show Paid if the purchase has been fully settled with the supplier.

• If a disbursement is billed before it is linked to a payment or creditor purchase, it will have a negative Client Balance. Once it is linked, the Client Balance becomes zero.

For more details, refer to How do I pay an anticipated disbursement, or record a purchase (creditor) of anticipated disbursements?