Here we’ll discuss what a Fee-Type Transaction is, and how you can utilize it for your company.
We will cover what is available, however depending on your business model, you may not use this type of transaction, or you may use it in a different way. Feel free to re-purpose the functionality as you see fit.
What is it?
A Fee-Type Transaction is a specific type of charge you are adding to an account, that increases the balance due. Often, fees are incurred by your business (agency) by working with an attorney agency or other legal institution in the attempt to collect the money owed, or charged by said attorney/institution. They are often different from Costs, in the sense that they relate more to litigation and may (once recouped from the debtor) be paid back to that specific entity (like an attorney). Examples of this may include:
- Attorney fees
- Legal fees
- Court fees
- Paperwork filing fees, and more
- The agency Simplicity Collections is collecting money from John Doe, who is refusing to pay.
- They have started litigation in order to bring a judgment against John Doe, and have hired an attorney named Jane Dewy.
- Jane Dewy is charging a fee of $200 for her services, so Simplicity Collections adds this $200 as a Fee to John Doe’s account. This means John Doe is responsible for paying that money back, in addition to his original principal/claim amount.
- John Doe finally pays, and any money recouped from him is allocated to pay off the $200 Fee.
- Then, Simplicity Collections has set up any money paid back to Fee-Type Transactions so it will disburse automatically, 100%, to the attorney (see our section on allocations/disbursements at the bottom of the page here).
- Simplicity Collections can now run reports to remit that money to their attorney Jane Dewy.
How do you set up a Fee?
By default, we supply you with several “stock” transaction descriptions under Financials > Transactions that you can choose from when posting transactions, however we don’t have any set up for fees.
You will have to go to Financials > Advanced at the top right-hand corner and create one. Just set the type to Fee and click Insert New to save it:
NOTE: The option Add to: relates to other types of fee disbursement categories you may have created in Financials > Settings/Judgment or in Settings > Clients. We start you off with one called “Att. Fee”, which refers to an attorney who may work with your office. Adding other categories is completely optional.
Once you click Insert New, this description will be available on Financials > Transactions. You can then select it from the drop down list, and put in the necessary information, such as how much the fee should be for. It will appear at the bottom as a transaction.