Difficulty: ⭐☆☆ Beginner
Time Required: 5-10 minutes
Prerequisites: Access to matter, disbursement creation permissions
Applies to: Practice Evolve v8.4+

? In this article:

1. Overview
2. Before You Begin
3. Step-by-Step Instructions
4. Troubleshooting Common Issues
5. Additional Information
6. Frequently Asked Questions
7. Related Articles

? Overview

What are Disbursements and Cost Recoveries?

Disbursements are expenses you pay on behalf of a client during their matter (e.g., court fees, title searches, expert reports). Cost recoveries are expenses you've already paid that need to be reimbursed by the client.

In simple terms: Disbursements = money you'll spend. Cost recoveries = money you've already spent and need back.

Why is this important?

Key benefits:

• ✅ Accurate tracking of all matter expenses
• ✅ Ensures clients are billed correctly for out-of-pocket costs
• ✅ Maintains proper trust accounting records
• ✅ Provides clear audit trail for all expenditures
• ✅ Helps manage cash flow and matter profitability

When should you do this?

Create disbursements when:

• Anticipated (future expense) – You know you'll need to pay for something soon (court filing, searches)
• Paid already – You've paid from office funds and need client reimbursement
• Paid from trust – You've paid using client's trust funds

Recommended timing:

• As soon as you know about the expense (for anticipated disbursements)
• Immediately after payment (for cost recoveries)
• Before invoicing – Ensures all costs are captured

Who can perform this task?

Required permissions:

• Create/edit matters
• Add disbursements
• Access to trust account (if paying from trust)

Typical roles: Fee Earners, Paralegals, Legal Assistants, Practice Managers

✅ Before You Begin

Prerequisites Checklist

• ☐ Matter is open and active
• ☐ You have the expense details (amount, description, GST status)
• ☐ You know the payment source (Trust, Office, or Anticipated)
• ☐ Receipt/invoice available (if already paid)
• ☐ 5-10 minutes available

What You'll Need

Information Required:

• Matter details – Which matter this expense relates to
• Expense amount – Total cost including GST (if applicable)
• Description – What the expense is for
• GST status – Is GST included? At what rate?
• Payment source – Trust, Office funds, or Anticipated (unpaid)

Documents (if applicable):

• Invoice or receipt (for paid expenses)
• Quote or estimate (for anticipated expenses)

Example expense types:

• Court filing fees
• Title searches
• Expert witness fees
• Courier/postage
• Government charges
• Photocopying/printing
• Travel expenses (if billable)

? Step-by-Step Instructions

Method 1: Creating from the Matter (Most Common)

Progress: Step 1 of 4 ●○○○

Step 1: Navigate to the Matter

Actions:

1. Open Practice Evolve
2. Navigate to Matters in the main menu
3. Search for and open the relevant matter
4. You should now see the matter dashboard

Progress: Step 2 of 4 ●●○○

Step 2: Access Disbursements Section

Actions:

1. In the matter dashboard, locate the Disbursements tab or section
2. Click Add Disbursement or New Disbursement button
3. The disbursement creation form will open

Expected Result:

You should see a form with fields for Amount, Description, GST, Type, and Date

Progress: Step 3 of 4 ●●●○

Step 3: Fill in Disbursement Details

Actions:

1. Description:Enter a clear description of the expense
   • ✅ Good: "Supreme Court filing fee - Statement of Claim"
   • ❌ Bad: "Court fee"
2. Amount: Enter the total amount
3. GST:Select the appropriate GST treatment:
   • GST Free – No GST applies (e.g., government charges)
   • Includes GST – Amount already includes GST (most common)
   • Add GST – GST will be calculated and added
4. Type:Select disbursement type from dropdown:
   • Court fees
   • Searches
   • Expert fees
   • Travel
   • Other (specify)
5. Date: Enter the date (defaults to today)

Example:

Description: "Title search - 123 Main Street, Brisbane"
Amount: $55.00
GST: GST Free (government charge)
Type: Searches
Date: 08/01/2026

Progress: Step 4 of 4 ●●●●

Step 4: Choose Payment Source

Decision Point:

How will this be paid?
├─ Already paid from Trust → Select "Paid from Trust"
├─ Already paid from Office → Select "Cost Recovery"
└─ Not yet paid → Select "Anticipated"

A. If Already Paid from Trust:

1. Select "Paid from Trust" option
2. Enter trust receipt number (if available)
3. The amount will be deducted from client's trust balance
4. Click Save

B. If Already Paid from Office (Cost Recovery):

1. Select "Cost Recovery" option
2. Attach receipt/invoice (optional but recommended)
3. This will be added to next invoice for reimbursement
4. Click Save

C. If Not Yet Paid (Anticipated):

1. Select "Anticipated" option
2. The expense will appear in aged disbursements report
3. You'll record the payment later when it's actually paid
4. Click Save

✅ Success!
You've created the disbursement. You should see:

• ☐ Confirmation message "Disbursement created successfully"
• ☐ New disbursement appears in matter's disbursement list
• ☐ Matter balance updated (if paid from trust)

Method 2: Quick Entry from Disbursements Module (Bulk Entry)

When to use this method:

• Entering multiple disbursements at once
• Processing a batch of receipts
• Month-end cost recovery entry

Quick Steps:

1. Navigate to Financial > Disbursements
2. Click Bulk Entry or Quick Add
3. Select matter from dropdown
4. Enter disbursement details in the quick form
5. Click Add Another to continue with next disbursement
6. Click Save All when finished

? Troubleshooting Common Issues

Problem 1: "Cannot Add Disbursement - Matter Closed"

Symptoms:

• Error message when trying to save
• Disbursement form won't submit

Solution:

1. Check matter status – is it marked as "Closed"?
2. If matter should be open: Reopen the matter first
3. If matter is legitimately closed: Contact your supervisor
   • May need to reopen temporarily
   • Or add to final invoice before closing

Prevention: Add all disbursements before closing matters

Problem 2: GST Amount Seems Wrong

Symptoms:

• Calculated GST doesn't match invoice
• Total amount incorrect after selecting GST option

Common Causes:

1. Wrong GST treatment selected
   • Government charges → GST Free
   • Supplier invoices → Includes GST (usually)
2. Amount entered incorrectly
   • Entered GST-exclusive when invoice shows GST-inclusive

Solutions:

If invoice shows $110 including GST:

✅ Correct way:

• Amount: $110.00
• GST: "Includes GST"
• System calculates: Base $100 + GST $10 = $110

❌ Wrong way:

• Amount: $100.00
• GST: "Add GST"
• System calculates: $100 + $10 = $110 (appears correct but GST allocation is wrong)

Quick GST Reference:

Problem 3: Disbursement Not Appearing on Invoice

Symptoms:

• Created disbursement but it's not on the invoice
• Client says they weren't charged for an expense

Possible Causes:

1. Disbursement marked as "Non-billable"
2. Invoice created before disbursement was added
3. Disbursement filtered out by date range
4. Matter has billing hold

Solutions:

Step 1: Check disbursement status

1. Open the matter
2. Go to Disbursements tab
3. Find the disbursement
4. Check "Billable" checkbox is ticked
5. Check "Status" is not "Written Off"

Step 2: Check invoice date range

1. Open the invoice
2. Check date range used
3. Ensure disbursement date falls within range

Step 3: Regenerate invoice if needed

1. Delete the draft invoice (if not yet sent)
2. Create new invoice with correct date range
3. Verify disbursement now appears

Problem 4: Trust Balance Went Negative After Disbursement

Symptoms:

• Matter trust balance shows negative amount
• Warning message about insufficient trust funds

What it means:
You've paid a disbursement from trust when there wasn't enough money in the client's trust account.

Immediate Actions:

1. ⚠️ Alert your trust accountant immediately – this is a compliance issue
2. Check if client needs to deposit additional funds
3. Review if disbursement should have been "Anticipated" instead

Resolution options:

1. Client deposits more funds → Trust balance becomes positive
2. Convert to Cost Recovery → You'll bill client to recover amount
3. Convert to Anticipated → Mark as unpaid until funds available

ℹ️ Additional Information

Understanding Disbursement Types

1. Anticipated Disbursements:

• What: Expenses you know you'll need to pay soon
• When to use: Before paying the expense
• Example: Court filing fee you'll pay next week
• Impact: Appears in aged disbursements report, doesn't affect trust balance yet
• Next step: Convert to paid when you actually pay it

2. Cost Recoveries (Office Funds):

• What: Expenses you've already paid from firm's money
• When to use: After paying from office account/credit card
• Example: Courier fee you paid from petty cash
• Impact: Added to next invoice for client reimbursement
• Next step: Will appear on invoice automatically

3. Paid from Trust:

• What: Expenses paid using client's trust funds
• When to use: After payment, when trust funds available
• Example: Title search paid from client's trust account
• Impact: Immediately reduces trust balance, no invoice impact
• Next step: Appears on trust statement

Best Practices

1. Timing – When to Record:

• ✅ Anticipated: As soon as you know about the expense
• ✅ Cost Recovery: Same day you pay the expense
• ✅ Trust Payment: Immediately after payment clears

2. Descriptions – Be Specific:

❌ Bad Examples:

• "Search"
• "Court fee"
• "Expert"

✅ Good Examples:

• "Title search - 123 Main St, Brisbane QLD"
• "Supreme Court filing fee - Statement of Claim #12345"
• "Medical expert report - Dr. Jane Smith, 15/12/2025"

Why it matters:

• Clients understand what they're paying for
• Easy to find when reviewing matter
• Clear audit trail for compliance

3. Documentation:

• Attach receipts/invoices to disbursements when possible
• Keep physical copies in matter file
• Note any special circumstances in description

4. GST Treatment:

Always check the source document:

5. Communication:

• Inform client of large anticipated disbursements
• Get approval before incurring major expenses
• Confirm trust funds available before paying from trust

Common Disbursement Types by Practice Area

Conveyancing:

• Title searches
• Plan searches
• Local authority searches
• Transfer duty
• Registration fees
• Mortgage registration
• Agent fees (if applicable)

Litigation:

• Court filing fees
• Service fees
• Expert witness fees
• Medical reports
• Barrister's fees (if recovered)
• Transcript fees
• Mediation fees

Family Law:

• Court filing fees
• Property valuations
• Parenting expert reports
• Financial disclosure searches
• Mediation/FDR fees

Estate Planning:

• Title searches (for property in will)
• Probate filing fees
• Advertising fees
• Valuation fees

Corporate/Commercial:

• ASIC searches
• Company registration fees
• Filing fees
• External legal opinions (if recovered)

Disbursement Workflow Example

Scenario: You need to file documents with the Supreme Court

Day 1 – Create Anticipated Disbursement:

Description: "Supreme Court filing fee - Statement of Claim"
Amount: $1,200.00
GST: GST Free
Type: Court fees
Payment: Anticipated

Day 3 – Actually Pay the Fee:

1. Pay court fee (from office funds or trust)
2. Get receipt from court
3. Update the disbursement:
   • Change from "Anticipated" to "Cost Recovery" (if paid from office)
   • OR "Paid from Trust" (if paid from trust)
   • Attach receipt
   • Add receipt number to notes

Month End – Invoice Client:

• Disbursement automatically appears on invoice
• Client is billed for the $1,200
• When they pay, you're reimbursed

Alternative: Trust Method:

• If paid from trust, no invoice entry needed
• Shows on trust statement instead
• Trust balance reduced by $1,200

❓ Frequently Asked Questions

Q1: What's the difference between Anticipated and Cost Recovery?

A: Timing and who's paid.

• Anticipated= Haven't paid yet (it's coming)
  • Shows in aged disbursements report
  • Doesn't affect trust balance
  • You'll mark it as paid later
• Cost Recovery= Already paid from your office money
  • You're out of pocket
  • Need client to reimburse you
  • Goes on next invoice

Example:

• Monday: Create Anticipated for $100 court fee you'll pay Friday
• Friday: Pay the fee from office funds
• Friday: Change to Cost Recovery so you get reimbursed
• Month-end: Invoice client, includes the $100

Q2: Can I edit a disbursement after it's been invoiced?

A: It depends on the invoice status.

If invoice is still a DRAFT:
✅ Yes – Edit or delete the disbursement. Changes will reflect when you regenerate invoice.

If invoice has been SENT/FINALIZED:
❌ No – Cannot edit. Would break audit trail. Invoice is locked.

If you need to fix a finalized invoice:

1. Issue a credit note for the error
2. Create corrected invoice
3. Or contact your practice manager

Q3: Should I create disbursements for photocopying and printing?

A: It depends on your firm's policy.

Many firms:

• Include photocopying/printing in hourly rate
• Only charge separately for large jobs (>100 pages)
• Check your firm's billing policy

If charging separately:

• Create disbursement for actual cost
• Or use standard per-page rate (e.g., $0.50/page)
• Be consistent across all matters

Q4: What if I paid a disbursement from the wrong source?

A: You can correct it, but timing matters.

If NOT yet invoiced:

1. Edit the disbursement
2. Change the payment source
3. Save changes
4. System will adjust balances accordingly

If ALREADY invoiced:

1. Do NOT edit (breaks audit trail)
2. Create correcting entries:
   • Reverse the incorrect entry
   • Create new correct entry
3. Document reason in notes
4. May need accountant assistance for trust corrections

Q5: How do I handle a disbursement that's only partially billable?

A: Create two separate disbursements.

Example: $500 expert report, client only pays $300

Method 1: Split at entry

Disbursement 1:
- Description: "Expert report - Dr Smith (billable portion)"
- Amount: $300
- Billable: ✓ Yes

Disbursement 2:
- Description: "Expert report - Dr Smith (firm absorbs)"
- Amount: $200
- Billable: ☐ No (or mark as written off)

Method 2: Write off portion

1. Create full $500 disbursement
2. Bill client for $300 on invoice
3. Write off remaining $200
4. Document reason in notes

Q6: What happens to Anticipated disbursements that never get paid?

A: You need to clean them up periodically.

They will:

• Remain in aged disbursements report forever
• Clutter your reporting
• Make reconciliation difficult

How to handle:

If expense no longer needed:

1. Mark as "Cancelled" or "Written Off"
2. Add note explaining why
3. Remove from future reports

If still expected:

• Leave as Anticipated
• Review monthly in aged disbursements report
• Chase payment when ready

? Related Articles

Essential Reading

Foundation knowledge:

• Understanding Disbursements and Trust Accounting – What disbursements are and why they matter
• Trust Account Basics for Fee Earners – How trust accounts work
• GST Treatment Guide for Legal Services – When to apply GST

Next Steps

Continue your learning:

• How to Pay Anticipated Disbursements – Converting anticipated to paid
• Creating Client Invoices – How disbursements appear on invoices
• Trust Accounting Reconciliation – Monthly reconciliation process

Advanced Topics

For experienced users:

• Bulk Disbursement Entry – Processing multiple disbursements efficiently
• Disbursement Recovery Strategies – Ensuring all costs are recovered
• Custom Disbursement Types – Setting up practice-specific categories

Video Tutorials

Watch and learn:

• ? Creating Disbursements Walkthrough (4:30) – Step-by-step video guide
• ? GST on Disbursements Explained (3:15) – When and how to apply GST
• ? Trust vs Office Payments (5:00) – Choosing the right payment source

Downloads & Resources

Helpful tools:

• ? Common Disbursements Checklist – By practice area
• ? GST Quick Reference Guide – One-page PDF
• ? Disbursement Entry Template – Excel template for bulk entry

? Need Help?

Still Stuck?

Quick Support Options:

• ? Live Chat: Click the chat icon (bottom right)
• ? Email: support@practiceevolve.com
• ? Phone: 1300 XXX XXX (Mon-Fri, 8am-6pm AEST)
• ? Submit Ticket: Create support ticket

When contacting support, include:

• Screenshot of the disbursement form
• Matter number
• What you're trying to do
• Any error messages

? Quick Reference Card

┌─────────────────────────────────────────────────────┐
│     CREATE DISBURSEMENT - QUICK CHECKLIST           │
├─────────────────────────────────────────────────────┤
│                                                     │
│  BEFORE YOU START:                                  │
│  ☐ Open the matter                                  │
│  ☐ Have expense details ready                       │
│  ☐ Know payment source (Trust/Office/Anticipated)  │
│                                                     │
│  STEPS:                                             │
│  ☐ Navigate to matter → Disbursements tab          │
│  ☐ Click "Add Disbursement"                        │
│  ☐ Enter description (be specific!)                │
│  ☐ Enter amount                                    │
│  ☐ Select correct GST treatment                    │
│  ☐ Choose payment source                           │
│  ☐ Save and verify                                 │
│                                                     │
│  GST QUICK GUIDE:                                   │
│  • Govt fees → GST Free                            │
│  • Supplier invoices → Includes GST                │
│  • Quotes → Add GST                                │
│                                                     │
│  PAYMENT TYPES:                                     │
│  • Anticipated = Not paid yet                      │
│  • Cost Recovery = Paid from office                │
│  • Trust = Paid from client's trust                │
│                                                     │
│  ⏱️  Time Required: 5 minutes                      │
│  ? Do this: When expense occurs                   │
│  ? Role: Fee Earners, Paralegals                  │
│                                                     │
└─────────────────────────────────────────────────────┘