Internal Debt Collection: Debt recovery – company invoices

[Claire Mills]

Hello

If your firm is chasing its own debt and a solicitor is dealing with it, does your company open internal “firm administration” or “debts” matter number, not the client file number?

Do you receipt any funds to the office account side only?

Do you transfer the actual invoice from the client matter to the company debt matter opened?

Be interested to know others procedures to remain compliant.

Many thanks.

[Nicky]

Hi
We open a new debt matter under the firm name referencing the relevant client and post only disbs such as Court fees relating to the debt recovery to this matter, therefore keeping the original debt and the recovery separate.

The original client matter with the outstanding debt remains open leaving the invoice there until payment is received.

[Claire Mills]

Likewise then. The fee earner has just decided to raise internal interim invoices for the Vatable disbursements incurred. Surely only necessary at the end of a successful recovery?

[Zoe Jones]

Hi
We post all debt recovery costs (both fees and disbursements) to a nominal ledger office account called “Debt Recovery Fees.” This helps keep them separate from the original client matter.
In some cases, debt recovery is unsuccessful, so this approach avoids having to write off additional billed disbursements on the client matter.
If the debt recovery is successful, we first allocate the recovered funds to the aged debt invoices on the client matter. Any recovered debt recovery fees are then transferred back to the Debt Recovery Fees nominal ledger.

[Lorraine Bunting]

We deal with this the same way that Nicky does, opening a separate Debt Recover Matter matter under the firm (with reference to the original matter) and keeping the original matter and debt recovery costs separate.

[Author]

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