Setting up split billing

You quantify work delivered to clients by recording time spent on their projects. Time has value. Based on the applied bill rate, it represents potential revenue. It also has an associated cost based on who performs the work.

For billing, you might agree to hourly billing (the value of time and expenses). Or, you might provide services for a flat fee, percentage of work done against a fixed fee contract, or a recurring amount for ongoing work. 

Regardless of the billing arrangement, the client receives a benefit. A single client may not be the sole beneficiary of your services. If you need to split an invoice among two or more parties, the parties receive a joint benefit. For example, let’s say a minor of divorced parents gets into trouble and a law company handles the misdemeanor matter. As agreed, both parents pay for the court charges and services provided by the company. The split might be 50-50 or another percentage split.

Take another example: an architectural company works on a new office building and the partners’ agreement for the project calls for sharing the costs based on their percent ownership.

CORE provides an easy and straightforward process for setting up the joint parties. It can handle an unlimited number of co-payers, and equally important, you lose none of the strategic and tactical information needed for smart decision-making:

  • Revenue
  • Cost
  • Margin
  • Realization

CORE allows you to refine the information by client, manager/attorney in charge, principal/partner, project or matter type, and so on.

Set Up Split Billing

Step 1 – Identify the clients to bill

In CORE, select Clients from the side menu > Contacts. Create any new client records needed. These are the parties who will receive an invoice for the matter or project.

Step 2 – Create the joint matters or projects

In CORE, you bill by project, so you want a project record for each party. From the side menu, click Projects > Manage Projects (or Matters > Manage Matters). This is where you identify the joint elements and the percentage split for future invoices. 

The first step is to create a primary project for the services. Enter data in the fields as needed and set the status to Active. Staff and managers will charge their time and expenses to the primary project (regardless of the contract type), so you will have billing and management information to work with.

Next, create project records for the split parties. If desired, you can make each split party project a sub-project of the primary project. Or they can be top-level project records. Again, enter data for each record as needed. Select the client record to receive a split bill. For Status, you might want to mark it as Complete or On Hold to avoid accidental charging of time and expenses. You can still bill the split party.

Now, return to the primary project record. Under the General tab, select the Billing Options sub-tab. Scroll to the Split Billing section of the screen and click Enable. Select each split party project from the drop-down and enter the split percentage for services and expenses. Also, in the Templates section of the Billing Options screen, select Split Billing as the Joint Invoice template. This ensures the proper invoice format and presentation.

Tip #1: One project record can be cloned to another. For example, you can clone the primary project to create each split party project record. You need only select a new ID and name and edit a couple of fields.

Tip #2: If you regularly have split billing situations, create one or more project templates for different billing arrangements (contract types). These templates might be a single project template or be multiple projects in a joint project setup. Then, simply choose From Template when creating a new project record.

Step 3 – Record time and expenses to the primary project or matter

As staff and managers work on the project, their time and expenses will be charged to the primary project. As usual, CORE automatically computes the billable amount for hours worked based on the correct bill rate and the cost for the person who charged the time. CORE handles expenses the same way, using the rates and markup data that you setup.

Remember, time and expenses should be promptly submitted to a reviewer for approval ... and just as promptly approved.

Step 4 – Bill the primary project or matter

There is nothing extra to do when billing. You have set up the split already. So, select Invoices from the side menu > Billing > Invoicing and click Batch Invoice in the Create Invoice drop-down. Make any adjustments as needed in the Invoice Filters and Options dialog; apply discounts and retainers, and other billing decisions. Finally, select Process as Final (or Draft) to generate the split invoices.

You can preview the invoices with a click and page through each split party invoice. Here are a few key items to double check:

  • Percentage splits for services and expenses are clearly shown.
  • Each invoice includes the split breakdown for each party.
  • The invoice number is the same for all split invoices.
  • Each invoice is addressed to the right party.

Don’t worry about emailing the invoices. CORE sends each split invoice to the right split party automatically. Check CORE Help Center for details on split billing.

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