Five records should answer the question
When someone asks “has this client paid?”, the answer should not depend on who remembers a transfer alert. The minimum useful record has five parts: the client, the matter, the bill, each receipt and the allocation of that receipt. The dates and method of payment matter as much as the amount.
A client can have several matters and several bills. An invoice list under the client is useful, but it is not enough if you cannot tell which matter an invoice belongs to. A payment recorded against the wrong bill can make one matter appear paid and another overdue even though the bank total is unchanged.
- Client and matter the bill belongs to.
- Invoice number, issue date, amount and due date.
- Each receipt’s date, amount, method and reference.
- How much of each receipt was allocated to this invoice.
- Remaining balance, including any credit or overpayment.
Work through a part-payment example
Suppose the firm bills ₦1,200,000 for a matter. The client pays ₦500,000 by bank transfer on 6 November, then ₦300,000 on 20 November. The bill should show two receipts, not one overwritten “paid so far” figure. If both are allocated to that bill, the outstanding balance is ₦400,000. The team should be able to open either receipt and see its bank reference and who recorded it.
If the second ₦300,000 was for another matter, the allocation must be changed through an auditable correction, not by quietly editing the original receipt. The bank transaction, receipt and bill balance should still be explainable later, even if the person who entered them has left the firm.
Do not confuse fees with money held for a client
A debtor may pay recovery proceeds to a law firm, or a family may place funds with the firm to disburse over time. That is a different accounting question from paying the firm’s professional-fee invoice. The firm needs to know what it holds for each client and matter, what it has paid out, what the client authorised and what remains. A bill-payment screen by itself does not establish those facts.
If the client agrees that some recovered money may be used to settle professional fees, record the instruction and the transfer between the client-money and fee positions explicitly. The books should show what happened on each date. The accountant and responsible lawyer should approve the opening position and any correction; software cannot infer an old balance from an incomplete spreadsheet.
Make reconciliation a routine
At least once each week, compare bank receipts to recorded receipts and unallocated amounts. Review overdue bills, credit balances and payments waiting for a matter or invoice. Decide who may approve outgoing client-money payments and who reviews the reconciliation. A client statement should be reproducible from the underlying transactions, not recreated by hand at year end.
FirmStack already lets firms issue bills in naira, record invoice payments and see what remains; its broader client-and-matter accounting work should be evaluated against these control questions when it is live. Ask us to demonstrate the exact workflow your accounts person needs, including a split payment or a receipt that is not a fee payment.