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International invoices and tax recovery

Tracker accepts invoices in the LEDES 1998, 1998BI, and LEDES XML formats. LEDES XML was created to accommodate international taxes. Taxes can be recovered tax on invoices submitted through Tracker, whether in LEDES 1998BI or other formats.
To recover VAT from an EU member country, the electronic invoice must be unaltered. If you adjust an invoice that includes tax, you might not be able to recover the tax. In other words, if you reduce and approve an invoice that includes tax from a firm in the EU, then your company will not be able to recover the tax charged in that invoice. Your Tracker Coordinator may have requested that Tracker configure your system to ensure that invoices to or from EU member countries are not altered and paid. If your company opts to enforce the EU VAT compliance rules, you cannot reduce and approve non-LEDES or LEDES 1998BI invoices billed from or to an EU member state. Instead, if there is a problem with the invoice, you should dispute the invoice.

Exchange rates in closed matters

During the life of the matter, Tracker converts all monetary amounts in the matter profile and closing fields using the most recent exchange rate applicable to your company. At the moment the matter is closed, the exchange rate from the matter currency to the company base currency is locked and preserved. Consequently, if you run a budget report for a matter that closed more than a year ago, the report will accurately reflect the budget for the matter, as converted to the company base currency, last year. Preserving this historical conversion rate is important because the conversion rate from the matter currency to the company base currency may have changed significantly from the time the matter was closed.

Law Firm Budget Currency Conversion

When a law firm matter budget is created or updated, the budget is saved in the matter currency. The exchange rate to the company base currency is also saved. If the matter currency is later changed or the matter is closed, it has no effect on the budget data or the budget currency exchange rate—the data is permanently stored in its original form.

Company budgets

Company budgets must be entered in the company base currency. The conversion of monetary amounts to a new matter currency does not apply to budgets. The exchange rate is locked at the time the budget is saved, and the exchange rate is not updated. If the matter budget is different from the company base currency, Tracker converts the budget amounts at the frequency specified in your company's currency conversion settings.

Accrual currency

Law firms can submit unbilled amounts in a currency other than the company base currency. Tracker converts the unbilled amounts to the company base currency, and the Accrual Period Ending Balance of an accrual is always stored in the company base currency.
The
accrual period ending balance
 is the sum of the unbilled total plus invoices not sent to AP (pending invoices) and is always stored in the company base currency. This amount is generated and stored on the accrual period lockdown event.
The unbilled total used to calculate the accrual is the unbilled amounts submitted by law firms plus other unbilled amounts. The currency exchange rate to the company base currency is not locked until the accrual period lockdown event. If a company user views an unbilled amount in a foreign currency before the accrual period lockdown event, the current exchange rate is used.
Tracker saves unbilled amounts in the currency in which they were submitted. The firm's invoices are also saved in the native currency, so the company can track spending against the unbilled amounts in the same currency in which they were reported.
On the accrual period lockdown event, the amount of any pending invoices or approved invoices that have not been sent to AP are totaled as stored in the accrual profile record in the company base currency.

Unbilled Amounts

There is no relationship between the unbilled amounts currency and the matter currency. When a firm or vendor submits unbilled amounts, they can specify the currency.
During the period when an unbilled amount has been entered but the accrual has not been generated, Tracker converts any foreign currency unbilled amounts to the company base currency using the most recent exchange rate applicable to your company.
On the accrual period lockdown event, the exchange rate for the unbilled amount to the company base currency is locked and preserved. Consequently, if you run an unbilled amounts report for any month in the past, the report will accurately reflect the total unbilled amount at the time the accrual was generated.

This article applies to:

  • Product: Legal Tracker
  • Subject: Invoices
  • Audiences: Company