Finance Connect for Canadian Firms

Relevant Background on Canadian Firms

-Canadian contingency firms use the term "disbursements" to be synonymous with the US term case costs or case expenses: Expenses incurred by the lawyers during the case, such as court filing fees, expert testimony, photocopying costs, mailing, and postage.

-Canadian contingency firms must draft the portion of a settlement to be paid to the law firm on an invoice. 

-Canadian businesses track taxes paid on the expense side as well as on the income side. There are a variety of taxes that might be applicable. 

-Filevine Payments is not compatible in Canada, and therefore, they cannot use QuickBooks Billing Dashboard. 

Recommended use of Finance Connect

We recommend the following features to add efficiencies to the Canadian Firm finance workflows. 

1) Expense Request

2) Disbursements

3) Time & Billing w/ QuickBooks Payments

Tax Treatment of Disbursements & Invoices

Generally, all disbursements and invoice data in Filevine will be net of tax. Filevine does not have a native place for tax amounts to accumulate. QuickBooks has native tax tools where HST (and other rates) can be applied at the transaction level. Tax liabilities can be collected and accounted for in QuickBooks, consistent with best practices. 

Expense Request

Any transaction in QuickBooks created from our Expense Request section will default to select the users tax default (for example "H") - and "Amounts are - Exclusive of Tax. This prompts QuickBooks to add a tax liability to the transaction. QuickBooks will then track the tax amounts. Although this is the default, the QuickBooks user can manually adjust the tax decision without breaking the integration. 

Invoices

Billable items are accumulated in Filevine when using our Expense Request section. These items are net of tax. These items can be quickly drafted onto an invoice when the case settles. The invoice will include other amounts owed to the firm, such as Attorney's Fees. The Filevine user will also add all other items to the invoice net of tax. When the invoice is finalized and pushed to QuickBooks with our Time & Billing w/ QuickBooks Payments feature, our systems will default to add tax to each line item. A QuickBooks user will review the QuickBooks invoice to determine if each line item requires a different tax treatment (certain expenses may be exempt from taxes, such as government filing fees or interest). The user can remove tax from certain items manually in QuickBooks. 

Adding tax to the invoice in QuickBooks increases the invoice total. The new total is not pushed to Filevine. Finalized Filevine invoices cannot be edited, nor is there a place for tax amounts to land on a Filevine invoice. When payment is made to the invoice in QuickBooks, the integration will push a payment to Filevine in the amount of the Filevine invoice. This payment is meant to represent the net of tax amounts. 

We have found that firm management is typically not concerned with leaving tax amounts out of Filevine as they are not a factor when calculating KPIs, outstanding balances, or other performance metrics (tax amounts are not indicative of performance).