This article provides a detailed explanation of the account summary section on the invoice PDF generated by our system. This section is crucial for understanding the breakdown of amounts related to the invoice, including balances, payments, credits, and new charges. The account summary is an optional setting on your invoice PDF template and automatically adjusts for client or matter level accounting.
Account Summary Definitions:
Balance Forward:
Definition: The total of outstanding amounts from all invoices created up to the day before the current invoice was generated.
Purpose: Helps track the cumulative balance that has carried over from previous invoices.
Payments from Trust/Retainer:
Definition: Payments made from the trust account specifically applied to this invoice. This updates as payments are made.
Display Rule: This section is hidden if the amount is $0.00.
Purpose: Shows how much has been paid from the trust account towards this invoice.
(Additional) Payments and Credits to This Invoice:
Definition: Non-trust payments and credits applied specifically to this invoice, updated as payments are made.
Text Display Rule:
If there are payments from trust/retainer applied to this invoice, the text should read "Additional payments and credits to this invoice."
Otherwise, it should read "Payments and credits to this invoice."
Purpose: Displays other payments and credits applied to the invoice outside of the trust account.
Other Invoices on This Date:
Definition: Sum of amounts of every other invoice created on the same day as the current invoice.
Display Rule: This section is hidden if no other invoices were created on the same day.
Purpose: Shows the total amounts of other invoices generated on the same date to provide context on the invoicing activity.
Other Payments, Credits, and Adjustments to This Balance:
Definition: Sum of payments, credits, and journal entries affecting the balance due on the invoices in the balance forward or other invoices from the same date.
Purpose: Provides a comprehensive view of all financial adjustments impacting the balance due.
New Charges:
Definition: Total of the invoice balance minus any credits applied in LeanLaw in the Draft stage plus any applicable taxes.
Purpose: Shows the newly billed charges on the current invoice.
Amount Due:
Definition: Sum of all previous items in the account summary.
Display Rule: When the account summary is enabled, this amount should match the "Amount Due" shown at the bottom of the invoice.
Purpose: Provides the total amount that is currently due for payment.
Usage: The account summary section helps clients and users to quickly understand the financial status of their invoices by providing a clear breakdown of all relevant amounts. It ensures transparency and aids in financial management by showing detailed information about balances, payments, credits, and new charges.
Note on Balance Forward and Backdated Payments:
If you record a payment dated October 15, 2024, for an invoice dated October 1, 2024, this payment will contribute to the balance forward of a subsequent invoice dated November 1, 2024, even if the subsequent invoice has already been created.
Example:
Invoice Date: October 1, 2024
Payment Date: October 15, 2024
Subsequent Invoice Date: November 1, 2024
In this scenario, the balance forward on the invoice dated November 1, 2024, will be reduced to reflect the payment made on October 15, 2024.
Purpose: This adjustment ensures that the balance forward accurately represents the outstanding amounts up to the day before the new invoice is created. Any payments recorded after the original invoice date but before the new invoice date will adjust the balance forward accordingly.
Note on Discounts:
We recommend adding discounts/credits to the invoice in LeanLaw in the Draft stage.
They will be reflected in the New Charges section of the Account Summary, the activity table of the invoice, and the Total at the end of the invoice.
In contrast, adding a discount to an invoice in QuickBooks Online as shown below may not work as expected and lead to unsatisfactory results. Adding a credit memo in QuickBooks Online is still supported.
