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Glossary

Accounting Period​

The span of time covered by an Income Statement. One year is the accounting period for much financial reporting, but financial statements are also prepared for each quarter and for each month.

Accounts Payable​

The liability arising from the purchase of Goods and Services on credit. An account payable does not involve the issuance of a formal written promise to a creditor/vendor , and it usually does not call for the payment of interest.

Accounts Receivable​

Every time a Company/Firm bills a Client, that bill becomes an Account Receivable. Accounts Receivable are very 'liquid' assets, usually being converted into cash within 30 to 60 days. Therefore, Accounts Receivable from Clients are classed as current assets, appearing in the balance sheet immediately after cash and cash equivalents.

Accrual​

The Accrual Basis of Accounting recognizes revenue in the period in which it is earned, and deducts in the same period the expenses incurred in generating this revenue. This type of accounting stresses the matching of revenue and related expenses. The alternative to using the Accrual Basis of Accounting is the Cash Basis, where revenue is not recorded until it is received in cash, and expenses are assigned to the period in which cash payment is made.

Adjusted Trial Balance​

A listing of all General Ledger Account balances after the amounts have been changed to include the Adjustment Entries made at the end of the period.

Adjustment Entries​

Journal entries required at the end of an Accounting Period to update the General Ledger Accounts before Financial Statements are prepared. Adjustment Entries serve to apportion transactions properly between the Accounting Periods affected and to record any revenue or expenses that have not been recorded prior to the end of the Accounting Period.

Aging Accounts Receivable​

The process of classifying Accounts Receivable by age groups such as current, past due 1-30 days, past due 31-60 days, etc. A step in estimating the uncollectable portion of the Accounts Receivable.

Auditing​

The formal examination of the Company's/Firm's General Ledger Accounts and Transactions.

Audit Trail​

A record of transactions against a specific account or range of accounts; a step-by-step record by which financial data can be traced to its source.

Balance Sheet​

A financial statement that shows the financial position of a Business/Firm by summarizing the assets, liabilities, and owner's equity at a specific date.

Bank Reconciliation For each General Ledger Account used in the system, there is a corresponding Bank Account, as established in the Maintain Bank Master routine. Therefore, transactions affecting General Ledger Accounts are reflections of transactions affecting the actual Bank Account. For example, when the user posts a transaction in E-Quinox that debits a specified GL Account, the corresponding Bank Account will also be debited when the transaction is processed. Bank Reconciliation is the process of comparing Bank Statements to the Firm's E-Quinox Account Statements to ensure that the transactions and balances of the GL Accounts and the Bank Accounts are in sync.

Batch​

A group of transactions; the sum of all transactions entered in the current Journal. The batch amount may be entered when the Journal is started, or when the Journal is posted to the General Ledger.

Bill Entity​

The person responsible for payment of work done for a Client. The Bill Entity may or may not be the Client themselves. For example, if the Firm has a Client who is 12 years old, the Parents of this Client would likely be the Bill Entity.

Bill Tax Rates​

The taxes that are applied to a Client Bill at the time of billing. Bill Tax Rates differ from WIP (Work in Progress) Tax Rates in the sense that some taxes cannot be applied/calculated when Time and/or Disbursements are posted. Having the distinction between the two eliminates the possibility of "double taxing" a Client's file.

Chart Of Accounts​

A listing of all the General Ledger Account Titles and Account Numbers being used within a Company/Firm. Client A person who is being represented by the Firm.

Contact (Affiliation)​

In E-Quinox, a contact is a person affiliated (associated) in some way with an Entity. A contact may be a Personal Contact, Marketing Contact, Lawyer Representing the Opposing Party, etc. Contact information is tracked for all types of Entities that exist within E-Quinox.

Contingency​

A provision in a contract stating that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event. For example, a contingency in a contract for the purchase of a house might state that if the buyer does not approve the inspection report of the physical condition of the property, the buyer does not have to complete the purchase.

Contingency Fee​

A method of paying a lawyer for legal representation by which, instead of an hourly or per job fee, the lawyer receives a percentage of the money the client obtains after settling or winning the case. Often contingency fee agreements, which are most commonly used in personal injury cases, award the successful lawyer between 20% and 50% of the amount recovered. Lawyers representing defendants charged with crimes may not charge contingency fees. In most states, contingency fee agreements must be in writing.

Control Account​

A General Ledger Account that is supported by detailed information in a subsidiary ledger. In E-Quinox, Control Accounts are those that are impacted by all of the automatic posting routines. For example, When the user posts disbursements, the system looks for the WIP Disbursements Control Account as the Debit Account.

Credit​

A credit is used to record a decrease in an asset and an increase in a liability or owner's equity (the amount entered on the right-hand side of an account).

Debit​

A debit is used to record an increase in an asset and a decrease in a liability or owner's equity (the amount entered on the left-hand side of an account).

Department​

The way in which different areas of Law are organized in a Law Firm. For example, a Firm may have a Corporate Commercial Department, a Litigation Department, a Real Estate Department, a Family Law Department etc. Departments within a Firm may also be spread out over Firm Offices; a Firm's Toronto Office may house the Real Estate and Litigation Departments, while the Firm's Dallas Office may house the Corporate Commercial and Family Law Departments. Departments may also be divided between Firm Offices; the Toronto and Dallas Offices may both house Corporate Commercial Departments. Timekeepers are not restricted to posting time to the Departments that are located in their Office.

Disbursements​

Any expense to the Firm acquired through work for a Client. For example, Long Distance Phone Calls, Postage Charges, Photocopy Charges. These costs are usually charged to the Client. Disbursements are sometimes broken down into Sundry Disbursements (Internal Firm Costs), and General Disbursements (paid for by a Cheque).

Entity​

An entity is any Person or Company that is in some way associated with the Firm. An Entity may be a Timekeeper (Lawyer, Partner, Secretary), Contact, Vendor, Client, Major Client, etc.

Fee Credit, Fee Credit Distribution​

Fee Credits are the way in which the income from a Client Bill is distributed among Timekeepers. Fee Credits are usually distributed according to the amount of work a Timekeeper has done on a Client's Matter. For example, if Timekeeper "George" performed 50% of the work on a particular Matter, he may be allocated 50% of the Fee Credits for that bill. Some Firms automatically assign a set percentage of the Fee Credits to the Originating Professional and the Responsible Professional. In this case, Fee Credits are then assigned to Timekeepers after these amounts for these two Professionals is taken off the top.

Firm Cheque​

A Firm Cheque is a cheque that is written to cover Client and/or Firm expenses. When the cheque is processed, it draws on Firm money, although the Client is usually billed for the expense at a later date.

Firm Cheque Requisition​

A Firm Cheque Requisition is the process of submitting a Firm Cheque proposal for approval. This task is usually performed by Firm Secretaries; the Secretaries submit the Firm Cheque Requisitions, and the Accounting Department (or Administration) approves and processes the Firm Cheque, or cancels the Firm Cheque Requisition if it is not approved. The process of submitting Firm Cheque Requisitions allows Administration to supervise and control the flow of money out of the Firm.

Fiscal Year​

Any 12 calendar month accounting period adopted by a Company/Firm.

Flat Fees​

Flat Fees are set amounts that are charged for specific tasks or types of Matters. For example, a Firm may always charge $400.00 for Wills, regardless of the amount of work involved.

General Ledger​

An accounting system that includes a separate record for each item in the Balance Sheet. For example, a separate record is kept for the asset Cash, showing all the increases and decreases in Cash that result from the many transactions in which cash is received or paid. a similar record is kept for every other asset, liability, and owner's equity. The form of record used to record increases and decreases in a single Balance Sheet item is called a General Ledger Account.

General Ledger Account​

A General Ledger Account is a means of accumulating in one place all the information about changes in a specific asset, liability, or owner's equity. For example, a General Ledger Account for the asset Cash provides a record of the amount of cash receipts, cash payments, and the current cash balance. Accounts are usually arranged in the General Ledger in financial statement order; Assets first, followed by Liabilities, Owners Equity, Revenue, and Expenses. The General Ledger Accounts serve as the basis for preparing the Balance Sheet and other financial statements.

General Ledger Journal Each business transaction is initially recorded in the General Ledger Journal. The Journal is a chronological record of business transactions, including the date of the transaction, the debit and credit changes in specific General Ledger Accounts, and a brief explanation of the transaction. After the transactions are entered into the Journal, the debit and credit changes in the individual Accounts are entered into the Ledger.

"Hard" Closing A Month​

In this scenario, once the accounting month has been closed, no more accounting entries can be made to that month. To "hard" close an accounting month, change both the Current Accounting Month and the Auto Post Month to the number of the new accounting month.

Income Statement​

A financial statement summarizing the results of operations of a Company/Firm by matching its revenue and related expenses for a particular accounting period. The Income Statement displays the Company's Net Income or Net Loss.

Invitees​

Those people invited to a specific firm Marketing Event. In E-Quinox, Invitees are managed in the Manage Invitees and Create Invitee List routines.

Limitation Dating The process of using dates and reminders to organize and schedule the various tasks involved with a Matter.

Major Client A Client, usually a large Company or Corporation, that provides the Firm with a 'more than usual' amount of business.

Management Groups​

A way in which Firms organize Timekeepers and/or Matters. Management Groups are unrelated Matters or Timekeepers that are grouped for some reason. For example, if two Timekeepers work well together, although they are from different Departments, they may form a Management Group.

Manual Cheque​

A cheque that is manually written out, rather than being computer generated. Manual cheques must be entered in to the system, and their cheque number must be specified rather than assigned.

Marketing Programs​

Programs/functions hosted by the Firm, as a means of marketing and/or public relations. In E-Quinox, each marketing program is assigned a start and end date, and is allocated a budget amount. The marketing program is broken down into marketing events, which are also assigned event dates and budget amounts. The break down is then taken one step further as marketing events are broken down into individual activities. Each activity is given a deadline by which it must be accomplished.

Matter​

A Client File. A Client may have many or no Matters. Each time a Client brings a new case to the Firm, a new Matter is opened for that Client.

Matter Department​

The Department in which the Matter is being worked on or is associated with. For example, a Real Estate Matter would be associated with the Real Estate Department of the Firm. However, work on a Matter is not restricted to those within the Matter Department; Timekeepers from other Departments, or from other Offices may post time to a Matter.

Month "13"​

This feature is used to allow Year End Procedures to occur while keeping the last month (12) in balance. Month '13' gives the Firm a chance to make any necessary adjustments and/or entries before rolling over into the new Fiscal Year. Reports that are available for Month '13' include; GL Trial Balance, Detailed GL, and GL Operating Statements. Note: Once the year is closed, all Fiscal Year End closing entries are posted to Month 13. All revenue and expense accounts are cleared to this month and are reset to zero.

Nature Codes In E-Quinox, Nature Codes are used to classify the nature of Matters (the general topic/issue of the Matter). Office A firm may have many different Offices (different locations), each Office housing certain Departments. Timekeepers are not restricted to posting Time to Matters within their own Offices or Departments. See Departments for more information.

One Sided Journal Entry​

The recording of a business transaction without equal dollar debit and credit amounts; usually the recording of either a credit without the corresponding debit, or a debit without a corresponding credit. Users must exercise extreme caution when making one-sided entries, as it will affect accounting balances. Originating Professional The Professional responsible for bringing the Client's work to the Firm (who first introduced the Client to the Firm).

Posting​

The process of transferring information from the General Ledger Journal to the individual General Ledger Accounts.

Requisition See Either Firm Cheque Requisition Or Trust Cheque Requisition.​

Responsible Professional The main Professional who is responsible for work done on the Client's Matter(s). The 'head' of a particular Matter.

Reversing Entries​

An optional Year-End procedure consisting of the reversal on the first day of the new Accounting Period of those year-end adjustment entries that accrue expenses or revenue and thus will be followed by later cash payments or receipts. The purpose of Reversing Entries is to allow Company/Firm staff to record routine transactions in a standard manner without referring to prior Adjustment Entries.

Sic​

The Standard Industrial Classification (SIC) system is a series of number codes that attempts to classify all business establishments by the types of products or services they make available. Establishments engaged in the same activity, whatever their size or type of ownership, are assigned the same SIC code. These definitions are important for standardization. The SIC codes were developed to facilitate the collection, tabulation, and analysis of data and to promote comparability in statistical analyses. Despite drawbacks in the classifications, it is useful to have a code in hand when doing research. Most business directories and directory databases use the SIC codes to classify companies. The federal government uses the codes for particular data series; for example, the Census of Manufactures and the Census of Retail Trade.

"Soft" Closing A Month​

This feature allows the user to enter information into two accounting months. For example, the Firm may decide to keep their Month End open for a few days, allowing entries to be made to both the accounting month that is in the process of being closed, and the new accounting month. To enable this feature, keep the Current Accounting Month as the month that is being closed, and change the Auto Post Month to the new accounting month.

Sub-Bills​

In E-Quinox, individual bills are broken down into at least one sub-bill. Sub-bills are the splitting of disbursements, fees, and taxes between the Bill Entities as set up at the matter level.

Tax Groups​

Tax Groups are combinations of Tax Structures; these combinations may make up a Compound Tax Structure, or may simply be a combination of the taxes that are used in a specific area.

Tax Registration Number A Company's assigned Tax Registration number.

Time Codes​

In E-Quinox, Time Codes allow Timekeepers to specify which types of Time Entries always involve a Disbursement Entry as well. For example, if a Timekeeper wishes to always post one hours worth of Time to a Client's Matter for every letter that is written in regards to that Client, it must be specified in the Maintain Time Codes routine. Also, if the Timekeeper wishes to automatically make a Disbursement Entry for Postage every time that a letter is written in regards to a Client, it must be specified in the Maintain Time Codes routine as well.

Timekeeper​

Any person who posts Time with the Firm (works with or for the Firm). Examples include Secretaries, Partners, Lawyers, Associates, Articling Clerks, etc.

Timekeeper Department​

The Department with which a certain Timekeeper is associated. For example, "Frank" is a Real Estate Lawyer, and therefore is associated with the Real Estate Department. Timekeepers are not restricted to posting Time to Matters within their Department.

Time Transfer​

Time Transfer is the process of transferring posted Time Entries from one Client to another, from one Matter to another, or from one Timekeeper to another.

Transaction Levy Surcharges​

Applies solely to the province of Ontario. The Lawyers Professional Indemnity Corporation (LPIC) is responsible for professional liability insurance for Lawyers in Ontario. Two transaction surcharge levies and a volume surcharge levy have been part of the insurance programs since April 1995. Each Civil Litigation transaction and each Real Estate transaction will attract a flat levy surcharge, regardless of the number of documents registered pursuant to each transaction. For Matters opened after January 1, 1996, the flat levy surcharge fee is $50.00. For Matters opened before January 1, 1996, the fee is $25.00. Documentation and payment of surcharges with respect to these transactions must be provided to the Law Society quarterly.

Transaction Reference Number​

A number automatically assigned to a transaction, for identification purposes (i.e. used to track and/or identify Cheque Requisitions).

Trial Balance​

A two-column schedule listing of the names and the debit or credit balances of all Accounts in the General Ledger. Trust Client's money held by the Firm (i.e. for payment of Bills, during Real Estate Transactions, etc.). Trust Bank A Trust Bank is a General Ledger Bank Account that is reserved for Trust money transactions only.

Trust Cheque​

A Trust Cheque is a cheque that is written to cover Client and/or Firm expenses. When the cheque is processed, it draws on Client's Trust money. When Clients use their accumulated Trust money to cover Firm expenses incurred on their behalf, they are saved the process of being billed later.

Trust Cheque Requisition​

A Trust Cheque Requisition is the process of submitting a Trust Cheque proposal for approval. This task is usually performed by Firm Secretaries; the Secretaries submit the Trust Cheque Requisitions, and the Accounting Department (or Administration) approves and processes the Trust Cheque, or cancels the Trust Cheque Requisition if it is not approved. The process of submitting Trust Cheque Requisitions allows Administration to supervise and control the flow of Client Trust money.

Trust Transfer Requisition A Trust Transfer Requisition is the process of submitting a Trust Transfer proposal for approval. In such Trust Transfers, the Client's Trust money is taken from the Trust Account and applied directly to a Bill.

Trust Receipt​

A Trust Receipt is produced every time a Client pays Trust money to the Firm. The Trust Receipt is used as a record, benefiting both the Firm and the Client.

Variances​

Adjustments made to the amount of a Client Bill. For example, if the value of the Time on a bill is $600.00, but the Firm decides to only bill the Client for $400.00 worth of Time, the variance amount on that bill is $200.00. Most Firms set Variance limits, allowing staff to adjust bills only up to a specified dollar amount per bill. If this limit is exceeded, the bill cannot be posted until approval is granted from the Accounting Department.

Vendor​

A Person or Company that provides the Firm with Goods and Services. Examples include Computer Hardware & Software Companies, Electric Companies, Telephone Companies, Janitorial Services, Caterers, etc.

Wip​

Work in Progress. WIP is work that is currently being done for a Client that has not yet been billed. Most Firms set WIP limits; once this limit is reached, the accumulated value of Time and Disbursements for a Client must be billed before any further Time or Disbursements may be posted.

Wip Tax Rates​

The taxes that are applied to a Client Bill prior to the time of billing. WIP Tax Rates are applied/calculated as Time and/or Disbursements are posted. WIP Tax Rates differ from Bill Tax Rates in the sense that some taxes may be applied immediately, while others must only be applied at the time of billing. Having the distinction between the two eliminates the possibility of "double taxing" a Client's file.

Working Trial Balance​

The Working Trial Balance contains the same information and has the same format as the Trial Balance; the only difference is the provision of a line for Debit and Credit Adjustments beside each Account Number as an aid for balancing.

Year End Closing​

The process of closing the Firm's Accounting Year and starting the next. Once the Month End procedures are completed for Month 12 or 13, the Firm must then close their current Fiscal Year. Note: Once the year is closed (through the Year End Closing routine), all Fiscal Year End closing entries are posted to Month 13. All revenue and expense accounts are cleared to this month and are reset to zero. Do not forget to change the system's default year.