How to set up the billing side of a client matter file from day one
When a new matter comes in, the immediate focus is the work itself: what needs to be done, which documents to gather, what the deadlines are. The billing side — the agreed fees, any retainer received, the disbursements that will follow — often ends up in a note or a spreadsheet, with the intention of tidying it up later. That delay is the most common reason that billing problems surface weeks or months down the line.
The solution is not a complex accounting system. It is recording four things from the outset, in the same file where the matter lives, so that any query — from a colleague, from the client, or from a review — has a clear answer.
What to record when you open the matter
1. The agreed fee and how it will be billed.
Before work begins, record the total fee or the basis for calculating it, the currency, and how payment is structured: a single fee on completion, staged payments as the matter progresses, or an initial retainer with a final account on completion.
A verbal agreement with the client is not enough. The matter file should hold a signed document — a client care letter, terms of engagement, or a fee estimate the client confirmed — setting out what was agreed. If the matter closes early or the client disputes the invoice, that document is the reference point.
2. The retainer, if one was taken.
If a retainer was requested before work began, the matter file should show: the amount requested, the date it was received, and the reference for the payment. Not the full bank statement — just enough to locate the payment if it is ever needed.
This matters because a retainer is not the final fee: it is a payment on account. If the matter costs less than the retainer, the surplus is returned to the client. If it costs more, a further invoice is raised. Without a clear opening record, that calculation becomes complicated.
3. Anticipated disbursements.
Every matter carries costs that the practice advances and then recovers from the client: search fees, Land Registry fees, registration charges, expert fees, translations. Some are known at the outset; others emerge as the matter progresses.
When the file is opened, note the disbursements that are already foreseeable: the Land Registry fee if a transfer is being completed, the cost of the searches required, the fee for any specialist report. The list does not have to be final — it is a starting point that gets updated as the matter moves forward.
4. The client's billing details.
If the client is a company, you will need a purchase order number, a cost centre reference, or the name of whoever authorises payment. If the client is an individual, confirm the exact name and the identification details that should appear on the invoice.
Getting this at the outset prevents the delay that happens when an invoice is already drafted and turns out to carry the wrong details.
Why billing information belongs in the matter file, not a separate system
The temptation is to keep the financial side of a matter in a separate spreadsheet or practice management system, and the legal documents somewhere else. That works while the matter is active and the fee earner handling it remembers where everything is. But when a matter goes quiet, when a colleague picks it up, or when the client calls six months later with a query, scattered information costs time.
A matter file set up from the start has one section where everything lives together: the fee agreement, the retainer record, the disbursement log, and the invoices raised. There is no need to search in two places.
Keeping it current during the matter
The billing section of the matter file is not filled in once and left. There are three moments when it needs updating:
- When a disbursement is incurred. Note the description, the amount, the date, and the reference for the supporting document.
- When an invoice is raised. Record the invoice number, the amount, the date it was sent, and the due date for payment.
- When payment is received. Confirm the amount received, the date, and how it came in.
These three moments require no extra work if they are built into the normal flow of the matter. What they require is not leaving them until later.
At the end of the matter
When a matter closes, the billing section of the file should confirm that everything is settled: fees invoiced, disbursements recovered, and — if a retainer was held — that the balance was either returned or billed.
A matter closed without squaring the billing record leaves open questions later: was everything invoiced? Is anything still outstanding? Does a credit note need to be issued? Those questions are harder to answer once the file is archived and months have passed.
The closing entry does not need to be elaborate. A single line is enough: "Matter closed. Fees invoiced and paid. No outstanding disbursements." Or whatever the position actually is.
At VerifyAct we build tools to help practices stay organised and error-free. Get in touch if that sounds useful.