Overview 

Scottish Legal Accounts supports Scottish-specific accounting workflows in Efimis, including:

• Scottish Combined Ledger
• Surplus calculation and reporting
• Surplus Dashboard Widget
• Scottish Daybook reporting
• Client bank funded disbursement payments
• Marking invoices as paid
• Surplus Adjustments / Surplus Transfers
• Scottish inter-journal / inter-ledger control accounts

These features are designed to support firms operating under Scottish legal accounting requirements, where client and office accounting activity is reported differently from other regions.

Scottish Legal Accounts functionality is available for firms using the Scottish region.

Scottish Inter-Journal Accounts

When a new Scottish environment is created, Efimis automatically creates the required inter-journal accounts.

These accounts are required for Scottish ledger postings and support the movement and reporting of values between the Office and Client sides of the ledger.

The inter-journal accounts are nominal accounts and can be edited where required.

If a firm operates more than one office, or uses more than one journal structure, additional inter-journal accounts may need to be created for the relevant journals.

• Inter-journal transfer accounts are only available for the SCO region.
• They must link an Office journal to a Client journal.
• Duplicate inter-journal transfer account pairs are prevented.
• Once created, the linked journal cannot be changed.

Firm Settings

Scottish firms have specific settings that control surplus reporting and ledger display.

The key settings are:

The Surplus Calculation Mode can be set to:

The Surplus Dashboard Widget uses the firm’s default surplus settings.

When running the Surplus/Surplus Funds Report, users can choose whether to report by Matter or Client using the report filters.

Surplus Targets can be set by currency. For example, a firm may have a separate surplus target for GBP and another currency where multi-currency is used. A zero value removes the stored target for that currency. 

What is Surplus?

In Scottish Legal Accounts, Surplus is the difference between the amount held in Client bank accounts and the qualifying ledger credit balances.

The ledger credit balances are calculated at Matter or Client level, depending on the Surplus Calculation Mode selected in Firm Settings or in the report filters.

Surplus is not a General Ledger balance. It is a live calculation used for operational monitoring.

A negative surplus indicates that Client bank funds are lower than the qualifying ledger balances in credit and should be reviewed.

Surplus Dashboard Widget

The Surplus widget is available by default on the Accountant dashboard for Scottish firms. It shows the firm’s current surplus position as at today’s date using the default Surplus Calculation Mode configured in Firm Settings.

For the selected currency, the widget identifies the firm’s position as:

• Available To Transfer when the surplus is above the target.
• At Target when the surplus matches the target.
• Surplus Shortfall when the surplus is below the target.

The widget also shows whether the firm is above or below its target and by how much.

The breakdown displays:

• Client bank balance
• Ledger balances in credit
• Surplus held
• Target retained

Where the firm uses more than one currency, select the required currency to view its surplus position. Surplus Adjustments remain restricted to the firm’s base currency.

Users with access to the Surplus Report can select View Report directly from the widget.

Where the user has permission to post Surplus Adjustments:

• Transfer Surplus is available when the firm is above its target.
• Increase Surplus is available when the firm is below its target.
• No adjustment action is displayed when the firm is at its target. 

After a Surplus Adjustment is completed, the widget updates to show the revised position. If the surplus settings are changed in Firm Settings, refresh the dashboard to show the updated target.

Scottish Combined Ledger

For Scottish firms, the matter ledger display is different.

Instead of showing separate Office and Client balances, Efimis displays a combined Ledger balance.

On the Matter screen:

• the ledger section is shown as Ledger Entries
• the matter hover summary shows a combined Ledger balance
• the client hover summary shows a combined Ledger balance
• Office and Client activity is brought together for Scottish reporting purposes

This gives users one combined view of the matter’s ledger position.

The Scottish Combined Ledger view applies to firms using the Scottish region.

Invoice Ledger View

Scottish firms can use the Ledger Invoice View setting to control how invoice-related ledger entries are displayed.

The available views include:

The Concertina view is usually clearer for Scottish firms because it keeps related invoice postings grouped together.

Managing Surplus

Surplus Adjustments are available for Scottish firms only. They create both sides of the movement in Efimis, but the firm must still complete the actual bank movement where required. Surplus can be increased or decreased using Surplus Adjustment actions.

• Surplus Adjustment is permission-controlled by the Post Surplus Transfer permission.
• The adjustment can increase or decrease surplus depending on the direction:
  • Office to Client = Increase Surplus
  • Client to Office = Decrease Surplus
• Only linked Office and Client journals can be used.
• The transfer must use the firm’s base currency.
• Client-to-Office adjustments cannot overdraw the Client bank account.
• Posted surplus transfers can be reversed where the user has the correct permission.

These should be used carefully, as they affect the movement between Client and Office funds.

Surplus Adjustment Types

Decreasing Surplus

To reduce surplus, the firm transfers funds from Client to Office.

Use this when the firm needs to reduce the amount held as surplus.

Steps:

1. From the Surplus widget, select Transfer Surplus. Alternatively, open the relevant Client bank or cashbook account and select Surplus Adjustment.  
2. The Surplus Adjustment side panel opens.  
3. Review the suggested Pay from account, Pay to and Amount.  
4. Complete the payment method, posting date, payment number and reason. The posting date cannot be in the future. 
5. Amend the amount if required. The suggested amount is the amount available after retaining the firm’s surplus target. 
6. Select Transfer.  
7. Complete the corresponding bank movement outside Efimis where required.

Increasing Surplus

Increasing surplus is less common and is generally used to correct errors or restore the surplus position.

To increase surplus, the firm transfers funds from Office to Client.

Steps:

1. From the Surplus widget, select Increase Surplus. Alternatively, open the relevant Office bank or cashbook account and select Surplus Adjustment.  
2. The Surplus Adjustment side panel opens.  
3. Review the suggested Pay from account, Pay to and Amount.  
4. Complete the payment method, posting date, payment number and reason. The posting date cannot be in the future.  
5. Amend the amount if required. The suggested amount is the amount needed to restore the surplus target.  
6. Select Transfer.  
7. Complete the corresponding bank movement outside Efimis where required.

Disbursements

Scottish firms should post disbursement payments through the Disbursements workflow.

For Incurred (Payment) disbursements, users can choose the account used to make the payment.

Tax columns and tax-inclusive controls remain visible 

The Client bank account option only appears where the account is eligible for the matter, currency and Scottish inter-journal setup.

Paying from a Client Bank Account

1. Open the required Matter.
2. Open Disbursements.
3. Select Create Disbursement.
4. Select Incurred (Payment).
5. In Pay from account, select the eligible Client bank account.
6. Complete the payment and disbursement details.
7. Save or post the transaction.
8. Review From Account to confirm the correct bank account was used.

Key Behaviour

Users should avoid posting these items as a general Office Payment, as this may not create the correct disbursement and Scottish ledger treatment.

Marking Invoices as Paid

Mark as Paid is available for Scottish invoices where the invoice is issued and there are available Client funds in the invoice currency. It is not available outside the Scottish region.

The action is used when the firm is ready to treat the invoice as paid for accounting purposes.

Effect on Surplus

Marking an invoice as paid does not change the firm’s calculated surplus.

The effect on surplus occurs when the invoice is issued or finalised. At that point, the invoice posting changes the qualifying ledger balance used in the surplus calculation.

When the invoice is subsequently marked as paid, Efimis creates linked Office and Client ledger entries. These entries offset each other within the combined Scottish ledger balance, while the Client bank balance remains unchanged. As a result, the calculated surplus does not change.

Whether qualifying ledger balances are grouped at Matter or Client level depends on the Surplus Calculation Mode selected in Firm Settings or in the report filters.

Mark as Paid does not:

• post a Surplus Adjustment

• move money between the Client and Office bank accounts

What Mark as Paid Does

Marking an invoice as paid:

• applies available Client funds to settle the invoice for accounting purposes

• updates the invoice payment position

• creates the required linked Office and Client ledger entries

• supports VAT and accounting treatment where applicable

• does not create a new external bank receipt

• does not change the calculated surplus

Availability and Limits

Unpaying an Invoice

Unpay reverses the invoice settlement and the linked accounting entries created by Mark as Paid. It does not move bank money and does not change the calculated surplus.

Where an invoice has been marked as paid in error, an Unpay Invoice action may be available, subject to permissions and the invoice status.

Important: Mark as Paid Does Not Move Money to Office

Selecting Mark as Paid treats the invoice as paid in Efimis using available Client funds.

It does not:

• create or increase the surplus

• post a Surplus Adjustment

• move money from the Client bank account to the Office bank account

• replace the need for the cashier to complete the bank transfer

If the firm needs to transfer surplus from Client to Office, the user must:

• post a Surplus Adjustment from Client to Office in Efimis

• complete the matching transfer between the Client and Office bank accounts in the firm’s banking system

In Plain English

Issuing or finalising the invoice is what affects the calculated surplus.

Mark as Paid settles the invoice using available Client funds, but the linked Office and Client ledger entries offset each other, so the surplus remains unchanged.

A Client-to-Office Surplus Adjustment reduces the surplus recorded in Efimis. The corresponding bank transfer physically moves the money.

Example

In this simplified example, issuing the £2,000 invoice reduces the qualifying ledger balances to £8,000 while the Client bank balance remains £10,000. This creates a calculated surplus of £2,000.

Marking the invoice as paid creates offsetting entries between the Office and Client sides of the combined ledger. The qualifying ledger total remains £8,000, so the surplus remains £2,000.

Surplus Reporting

The Surplus/Surplus Funds Report shows the firm’s surplus position for a selected date.

The report can be run by:

• Matter
• Client

The report can be produced in:

The report defaults to the firm’s Surplus Calculation Mode, but users can override this in the report filters by choosing Matter or Client.

If the firm uses multiple currencies, the report shows currency values separately rather than combining them into one converted total.

Running the Surplus/Surplus Funds Report

1. Open Reports from the main navigation menu.
2. Locate the Surplus/Surplus Funds report.
3. Open the report.
4. Select the required As At date.
5. Select the required Calculation Mode:
   Matter to calculate surplus using matter credit balances.
   Client to calculate surplus using client-level balances.
6. Choose whether to include Detail:
   use Summary if you only need the overall surplus position.
   use Detail if you need to see the matters or clients included in the total.
7. Run the report.
8. Review the Client Banks Total, Client Accounts Total, Surplus, Surplus Target and Transferable Total.
9. If multiple currencies are used, review each currency section separately.

Daybook Reporting

The Scottish Daybook contains a summary followed by a transaction listing.

The printed report:

• Shows the account code and account name in the summary.
• Shows the Matter Number rather than the matter name or title.
• Displays parent transaction rows separately from their posting rows.
• Indents posting rows and shows the account code and account name.
• Maintains the correct Matter Number across related rows that share the same displayed Transaction ID.
• Displays “No Office or Client postings found for the selected date.” when there are no relevant postings.
• Displays a warning if the report reaches its detail-row limit and additional rows cannot be shown.

Running the Scottish Daybook Report

1. Open Reports from the main navigation menu.
2. Locate the Scottish Daybook report.
3. Open the report.
4. Review the Office and Client postings for the selected day.
5. Check the debit and credit summaries.
6. Run or review the Surplus Report, if required.
7. Lock the relevant ledger/journal period where this forms part of the firm’s process.

If users need to review postings across more than one day, they should use the relevant General Ledger reporting instead.

Best Practices

• Review Scottish Inter-Journal Accounts before processing live transactions.
• Confirm the firm’s Surplus Target before go-live.
• Confirm whether surplus should be calculated by Matter or Client.
• Use the Surplus Dashboard Widget to monitor the current surplus position.
• Use the Surplus/Surplus Funds Report for formal review and supporting detail.
• Use Concertina invoice ledger view for clearer Scottish invoice reporting.
• Post disbursements through Disbursements → Incurred (Payment) where the payment relates to a disbursement.
• Do not use a general Office Payment where the payment should be recorded as a disbursement from Client funds.
• Check Pay from account carefully when posting incurred disbursement payments.
• Review From Account after posting to confirm the correct bank account was used.
• Run the Scottish Daybook as part of daily accounting checks.
• Lock ledgers/journals after daily checks where this forms part of the firm’s internal accounting process.