A court fee of three hundred pounds leaves your office account in March, the matter settles in July, and the bill goes out with the fee nowhere on it. Nobody notices, because nothing in the firm is built to notice.
That payment was a real transfer of your money to the court on the client's behalf, and until it comes back it sits in the accounts as an asset nobody owns. Take twenty matters in a year carrying an unrecovered search fee, a set of medical records or a process server's charge, at an average of two hundred pounds each, and the firm has funded four thousand pounds of other people's litigation without ever deciding to. The figures are illustrative and your own mix of work will give a different answer, but the shape of it holds. None of it shows up as a loss, only as slightly less cash than the fee income suggested, which is the hardest kind of shortfall to trace.
The reason is ownership rather than carelessness. When the fee earner pays a disbursement, or asks accounts to pay it, the assumption on both sides is that the other one will put it on a bill. The fee earner treats the payment as an administrative step and expects it to reach the next invoice. Accounts post it to the matter ledger and wait for a billing instruction. Between those two reasonable positions sits a payment nobody has been told to recover. Add a fee earner who leaves, or a file that goes quiet for four months, and the payment ages on the ledger while everyone assumes it has been dealt with.
Work in progress gets read, because somebody looks at an ageing report and asks why a matter has carried unbilled time since February. Unbilled disbursements age in the same way and seldom attract the same attention, even though the money has already left the firm. Unbilled time is capacity you spent and can spend again next month, while an unbilled disbursement is cash that has gone.
Read your disbursements the way you read work in progress
Give recovery a named owner on every matter, and make it the fee earner rather than the accounts team, because only the fee earner knows whether the payment was properly incurred and agreed with the client. Then produce an ageing schedule of unbilled disbursements and set it beside the work in progress report, oldest first. Anything sitting there from before the last bill you delivered on that file becomes a question somebody answers this week.
At the point of billing, run a plain check on the matter. Every payment out has either been billed, or written off with the reason recorded by the person who took the decision, or explained in a note on the file, and there is no fourth outcome. Writing one off is a legitimate commercial decision, so long as somebody made it deliberately and the client's costs position reflects it.
The accounts position deserves a check of its own. Client money is held for that client and used only for that client's proper purpose, so where a disbursement leaves client money the question is whether it was properly payable on the day it left, not months later. Your records must show the position on every matter at any time, which makes an unbilled disbursement a live ledger question rather than a housekeeping one. A client who opens a bill carrying eight months of forgotten payments has met the surprise that current costs information exists to prevent.
What software sees, and what it does not
Overnight, the Bracton AI Assistant reads your live matters inside the case management system your firm already runs, and one thing it looks for is a payment out with no charge against it and no recorded decision. Working through another vendor's interface, the assistant sees what that interface exposes. Most systems make matters, documents, correspondence, key dates and time entries available readily enough. Some expose the ledger thinly, some not at all, and where the ledger stays closed the assistant looks to the file for evidence of the payment, being the fee note or counsel's invoice on the correspondence record. Inside Bracton, the case and client management platform, no interface stands in the way, so it reads the ledger as readily as the correspondence. Every output goes to a qualified fee earner for approval, and nothing is written back to your system until a person has approved it.
Payments out of the client account are exactly what your ledgers and cash book show, which makes the ledger the sensible place to start on your own firm. The review reads an export of your client ledgers, cash book and bank statements against the SRA Accounts Rules and nothing else, and it puts in writing what has left the client account and whether your records support it. To read that position on your own money for a fixed fee, book a client account review.