In this video learn how to allocate payments in the system
Video Transcript:
In this video, we’ll walk through how to allocate payments in the system, including how to configure your firm’s automatic payment allocation settings, receive payments, apply unallocated funds, and manually adjust allocations when needed.
To configure automatic payment allocation settings at the firm level as an admin, select your username in the top right corner and navigate to Firm Settings. From there, open the Configurations tab and select Billing & Payments.
Within the Billing & Payments section, choose your firm’s preferred auto-allocation type:
* **Auto-allocate to expenses first** applies payments to expenses before fees, starting with the oldest invoice and working forward.
* **Auto-allocate to fees first** prioritizes fees before expenses using the same oldest-invoice-first logic.
In both cases, the prioritized item type is paid first, even when a payment only partially covers a single invoice.
Most firms choose **Auto-allocate to expenses first**, so that option is used throughout this example.
Now that your firm’s default allocation preferences are configured, let’s walk through how those settings affect an actual payment.
Navigate to **Payments** and select **Receive Payment**. Then select the client, matter, and/or invoice the payment should apply to.
By default, the payment will be set to **Auto-allocate**.
* If one or more invoices are selected in the Invoice field, the payment will automatically apply to those specific invoices.
* If no invoice is selected, the system will automatically apply the payment to all open invoices for the client based on your firm’s allocation settings.
If the payment exceeds the invoice balance, the system applies the amount owed and saves the remaining balance as an unallocated payment.
If it’s a partial payment for a single invoice, funds are applied according to your firm default—for example, expenses first and then fees.
Auto-allocation handles all of this automatically, adapting to multiple payment scenarios without requiring manual intervention.
In this example, enter the payment without selecting a matter or invoice and uncheck **Auto-allocate Payment** so the payment remains unallocated. Select **Save**.
The full payment amount will remain unallocated and can be viewed in the Payments grid under the **Unallocated Amount** column.
Next, let’s look at how to apply intentionally unallocated funds.
To view and apply unallocated funds, select the ellipsis icon and choose **View Allocations**. This opens the payment details screen for the selected payment.
At the top of the page, you’ll see:
* The payment number
* Total amount paid
* Allocated amount
* Amount left to allocate
You’ll land on the **Allocated** tab by default. If any portion of the payment had already been allocated, those details would appear here. In this example, nothing has been allocated yet.
Switch to the **Unallocated** tab to see all outstanding invoices for the client. You can search by:
* Invoice number
* Client name or number
* Matter name or number
From here, funds can be allocated individually or in bulk.
### Allocating Funds to a Single Invoice
There are two ways to allocate funds to a single invoice:
1. **Use the suitcase icon** to quickly select invoices for allocation.
2. **Use the pencil icon** for more detailed control over how funds are distributed.
As funds are applied, the amount left to allocate decreases automatically while the total allocated amount increases.
When using the pencil icon, you can:
* Allocate a different total amount
* Override the firm default by switching to **Auto-allocate to fees first**
* Choose **Allocate by fees or expenses** to manually specify amounts
This flexibility is especially useful for retainers, partial payments, or situations where payments need to be distributed differently than the firm’s default settings.
You’ll also see an allocation date. By default, it matches the payment date, but it can be adjusted if needed.
Select **Save** to complete the allocation.
Once allocated, invoices move from the **Unallocated** tab to the **Allocated** tab.
From the Allocated tab, select the view icon to see exactly how the payment was applied. The details grid includes:
* Charge number
* Entry type (time or expense)
* Member
* Description
* Billed amount
* Allocated amount
### Editing or Removing Allocations
To make changes to an allocation, select the pencil icon next to the invoice.
From here, you can:
* Update the allocation date
* Change the allocation type
* Adjust amounts applied to fees and expenses
If necessary, select the trash can icon to remove the allocation entirely.
When an allocation is removed:
* Funds are returned to the amount left to allocate
* The invoice moves back to the **Unallocated** tab
### Bulk Allocation
If you’re working with multiple invoices, bulk allocation can save time.
Select multiple invoices—or choose **All**—then open the bulk actions dropdown and select **Auto-allocate**.
The system will allocate payments across the selected invoices using your firm’s default allocation settings.
Keep in mind that you are not required to allocate the full payment amount immediately. Unallocated funds can remain available for future billing activity.
In this example, the payment was not tied to a specific matter during the Receive Payment process. As a result, the funds can be applied to pre-bills for any matter associated with the client.
If you want the funds restricted to a specific matter’s pre-bills, select **Assign Unallocated Funds to Matter** and choose the appropriate matter. The funds will then only be available for that matter.
After allocations are complete, you can continue managing the payment directly from the Payments page.
Select the ellipsis icon next to the payment to:
* Reopen the **View Allocations** section
* Transfer unallocated funds to another matter
* Edit or delete the payment
* Issue a refund
* Review payment history for auditing purposes
That concludes this walkthrough on payment allocation.
You should now be able to:
* Configure your firm’s default allocation settings
* Receive and allocate payments automatically or manually
* Manage unallocated funds
* Review and edit allocations as needed