Transaction Types provide a broad account of financial transactions, so the list of available options is quite comprehensive. Therefore, likelihood of you needing a new one is slim.
What they do is allow us to categorise financial transactions into debt, collection related financials and then into costs and interest. We can determine if costs are legally recoverable, or not and which types of transactions relate only to your client, debtors or both. Each type is then grouped and can be linked to your MYOB or Xero chart of account codes for integration.
But it is Charge codes that are used to add financial transactions to cases and clients. Why have a transaction type AND a charge code you might ask? Charge Codes provide granularity to the financial transactions in DebtCol, allowing the maximum flexibility in reporting.
Each Charge code is linked to a Transaction Type. Therefore, Transaction Types represent a group of Charge Codes, where the Transaction Type determines the broader financial impact of a transaction.
Some basic examples of debtor only transaction types are:-
- DEB - Debt Amount
- COML - Commission to the Debtor
- IBS - Interest Before Summons
Some basic examples of client only transaction types are:-
- CLPT - Client Payment
- TRRF - Trust Refund
- TTCR - Trust Transfer
Some basic examples of transaction types for both debtor and client are:-
- CRT - Court Fees
- SRV - Service Fees
- SSC - Scale Solicitors Costs
IMPORTANT: Changing the recoverable flag on a transaction type will change how costs are expressed on the case manager debt summary. It will move them from "legal costs" to "other costs". This can mean they are excluded from the legal process, so care must be taken with this setting. Contact helpdesk if you are unsure.
Creating a new Transaction Type
Tools > Accounts Setup > Transaction Type Maintenance
A transaction type code must be unique. Enter your new transaction type code in the "Code" field.
IMPORTANT: The code should not contain any spaces or characters other than letters or numbers; except a full stop.
Describe the transaction type where indicated.
Choose the appropriate category from the list. This will define the type as relating to debt amounts or other financial transactions that relate to the collection of the debt.
If the type is a collection category, specify if it’s interest or costs.
Specify if the type is a debtor or credit.
If the type is relating to costs that are legally recoverable from the debtor, tick the box where indicated.
IMPORTANT: Recoverable costs can create "agency costs" against a debt. "Agency Costs" is the gap between what the debtor has been charged and what you have charged your client. If "agency costs" are accrued on a debt, the system will try to recover them from the client at some stage. This will happen one of three possible ways:-
- Where a trust payment has been allocated against the recoverable costs not charged to the debtor. The system will not refund them to the client, but instead, refund them to a client that represents the agency so that they can be drawn from the trust account into the agencies operating account as income.
- Where a payment made direct to the client has been allocated against the recoverable costs charged to the debtor. The system will debit the client for these costs.
- Where the operator tries to close a debt that has agency costs, depending on how the closure action has been setup, the operator can either charge the agency costs to the client or write them off.
Choose if it is to be posted against the debtor, client or both.
DebtCol can calculate interest on values and apply them either daily or monthly. This is governed by the end of day schedule so that is required to be run for this to work. So if interest is to be calculated and applied automatically, specify the rate and application where indicated.
Assign a pre-defined transaction group where indicated.
Assign a pre-defined General Ledger code where shown, linking them to bank accounts where needed.
When using MYOB or Xero you must map related General Ledger codes to transaction types.
These are the standard system transaction types that need to be linked to the trust bank account:-
These are the transaction types that need to be linked to the general operating bank account:-
The rest of the transaction types will be a combination of debt components such as DEB (debt components shouldn't have General Ledger codes on them) and income/disbursements (which should be linked to a General Ledger code; even if you have a single General Ledger code for all income).