Billable Item Categories & Cost Reporting — Accounting Department Guide

What Are Categories and Cost Types?

Every billable item (flat fees, expenses, and time entries) can now carry a category that identifies the type of charge. Categories carry a cost type — Hard or Soft — which is used to break down billing in your reports.

Cost types only apply to Expense items. Flat fees and time entries are never classified as Hard or Soft, and they never appear in the Hard Cost or Soft Cost columns on the Invoice Report. This is intentional: flat fees and time entries represent attorney service charges and are grouped into a separate "Total Fees" bucket instead. The Hard/Soft distinction exists specifically to separate out-of-pocket disbursements paid to third parties (expenses) from internal service charges — a distinction that only makes sense for expenses.

Hard costs = money paid out-of-pocket to third parties on the client's behalf (court fees, sheriff fees, filing fees, etc.)
Soft costs = internal service charges billed for the firm's own work

Some categories have no cost type at all — their expenses are excluded from both the Hard and Soft columns (though they still count toward Total Expenses). This applies to any custom category you create with "None" selected for cost type, and also to the built-in Attorney Fee and Client Charge categories. This would typically be reserved for professional fees or non-classified items.

Part 1: Setting Up Categories in Admin

Creating Custom Categories

If the built-in categories don't cover all your charge types:

1. Go to Admin > Billable Item Categories
2. Click Add Category
3. Enter a name (e.g., "Process Server Fee")
4. Choose a cost type: Hard, Soft, or None
5. • The form pre-selects Soft — change it if needed
   • If you select None, expenses using this category will not appear in either the Hard or Soft cost columns on the Invoice Report (they still count toward Total Expenses)
5. Save

Optional: Allow Per-Item Cost Type Override

By default, every billable item inherits its cost type from its category. If you ever need to override the cost type on a specific item:

1. Go to Admin > Billable Item Categories
2. Enable "Allow Category Cost Type Override"

When enabled, a Hard/Soft toggle appears directly on the billable item form.

Optional: Show Category Labels on Invoices

To have the category name (e.g., "County Fee") appear as the primary label on client invoices:

1. Go to Admin > Invoice Settings
2. Enable "Show Category Labels on Invoice"
3. Optionally enable "Include Detailed Descriptions" if you want the free-text description to appear after the category name (e.g., "County Fee – Filing for Case #1234")

Existing organizations start with this off — invoices look the same until you opt in.

Part 2: Applying Categories to Billable Items on Cases

When adding a flat fee or expense on a case:

• A Category dropdown now appears on the form
• Select the appropriate category (County Fee, Sheriff Fee, etc.)
• For built-in calculated categories (County Fee, Writ Filing Fee, Sheriff Fee, Hearing Fee, Attorney Fee), the amount and description auto-populate from your fee settings — the same auto-calculation as before
• The description field becomes optional when a non-Legacy category is selected (the category name already identifies the charge)

Existing items created before this update are automatically treated as "Legacy" — nothing changes on them.

Part 3: Updating Workflow Auto-Billables

Workflow steps can automatically generate billable items when a step is completed. To assign categories to those auto-generated items:

1. Go to Admin > Workflows and open the relevant workflow
2. Open a workflow step and go to the Auto-Billables section
3. Click Edit on an existing auto-billable, or Add Auto-Billing Item
4. In the dialog, find the Category field and select the appropriate category
5. • For county fees attached to workflow steps (e.g., filing fees that fire when a "File with Court" step is completed), select County Fee
   • For sheriff-related steps, select Sheriff Fee
   • For attorney service charges generated by a step, select Attorney Fee
5. Save the step

Once categories are set on auto-billables, any items automatically generated by completing that step will carry the correct category and cost type — no manual categorization needed per case.

Part 4: How the Invoice Report Columns Are Calculated

The Invoice Report (Reports > Invoices) has two new columns: Total Hard Costs and Total Soft Costs. Here is exactly what goes into each:

Important: Flat fees and time entries are never sorted into the Hard or Soft columns — they only appear in Total Fees, regardless of what category they carry. Hard/Soft classification is exclusively for expenses.

If an expense has no category, or its category has no cost type set (including Attorney Fee and Client Charge, which have no cost type), it will not appear in either the Hard or Soft column — but it will still count toward Total Expenses.

The Billable Items Report (Reports > Billable Items) also has a new Cost Type column showing "Hard" or "Soft" on each individual line item.

Quick Reference: Category → Cost Type

Nothing in the existing system breaks — Legacy items continue to work exactly as before. Categories are purely additive, and you can adopt them at whatever pace works for the office.