Understanding Rates Within Matters.Cloud

Understanding Rates Within Matters.Cloud

Introduction

For legal and professional service firm understanding and applying hourly rates is critical for both internal reporting and when raising invoices to clients. Properly configured hourly rates ensure precise billing, managing to client budgets, and financial reporting. This guide will help you navigate the setup and application of hourly rates within Matters.Cloud, providing clarity and efficiency in your financial operations.

Key Concepts

Rate Hierarchy

The concept of a rate hierarchy in Matters.Cloud refers to a structured system for determining which rate to apply when logging time, based on a predefined order of precedence. This hierarchy ensures that the most specific and relevant rate is used in situations where multiple rates could apply. The hierarchy starts with the user default rate, which is the base rate applied unless overridden by more specific rates.

The rate hierarchy, from lowest to highest priority, is as follows:
  1. User Rate. This is the default rate applied to time entries unless overridden by a Matter or Client rate.
  2. Client Rate. Overrides the User Default Rate. This rate automatically applies to time entries for the selected Client/User combination. It can be set for either all users or a specific user.
  3. Matter Rate. Overrides both Client and User rates. This rate applies automatically to time entries for the selected Matter/User combination and can be set for either all users or a specific user.
  4. Activity Rate. Overrides Matter, Client, and User rates. This rate is automatically applied when the associated activity is selected.
  5. Time Entry Rate. Users can override the assigned rate directly during the time entry process.

Rate Types

In Matters.Cloud, firms have the flexibility to configure multiple rate types to cater to various legal work categories or pre-agreed discount arrangements. This allows for a tailored approach to billing that reflects the diverse nature of legal services provided. For example, a firm might establish rate types such as Standard, Discount, and Premium, each with predefined rates that correspond to different service levels or client agreements.

This setup simplifies the process of assigning appropriate rates to matters, as each matter can automatically inherit the configured rates associated with its assigned rate type. This not only streamlines the billing process but also ensures consistency and accuracy in how rates are applied across different cases and clients. By leveraging rate types, firms can effectively manage their billing strategies and maintain clear, organised financial records.
Note: When using rate types, you need to create associated rates for each level within the hierarchy that you wish to apply.

Billable and Non-Billable

In Matters.Cloud, time entries can be categorised as either billable or non-billable, each serving distinct purposes within a firm's operations.
  1. Billable. refers to hours worked on tasks or projects that are directly chargeable to clients, contributing to the firm's revenue
  2. Non-billable. refers to activities that are necessary for the firm's operations but do not directly generate revenue, such as administrative tasks, training, and internal meetings. 

Setting Up Rates

Step-by-Step Process

  1. Navigate to the Rates Section:

    • Go to the "Settings > Time > Rates" menu.

  2. Create a New Rate:

    • Click on the "New Rate" button.

  3. Define Rate Details:

    • Related to: Specify whether the rate is a User, Client, Matter or Activity rate.
    • Start date: Specify the date the rate should be effective from.
    • Resource type: Specify if the rate should apply to all users or a specific user. (applies to client and matter rates only)
    • Rate: Enter the hourly rate that applies.
    • Apply rate percentage: Specify if the rate should be adjusted to include a rate percentage if this has been specified on the matter.
    • Rounding: Specify if the rate should round to the nearest integer value when applying a rate percentage.
    • Currency: Specify the currency that applies to this rate.

Managing Rates

Updating Existing Rates

To update an existing rate:

  • Go to the "Rates" section.
  • Select the rate you wish to update.
  • Make the necessary changes and save.
Note: When updating a rate, consider first whether a new rate should be added with a different start date. Updating a rate will automatically re-value any applicable time entries that are not yet included on a draft or final invoice.

Deleting Rates

To delete a rate:

  • Ensure the rate is not currently in use within any active project or rate card.
  • Select the rate and click on the "Delete" button.
  • Confirm the deletion.
Note: When a rate is deleted any existing time that was calculated using that rate will remain with the rate that has been applied, unless you manually edit the time entries or perform a rate re-calculation using the time transfer function.

Summary

Effectively managing rates in Matters.Cloud is crucial for accurate financial management and client satisfaction. By understanding the different types of rates, how to set them up, and best practices for managing them, you can ensure that your organisation's financial operations run smoothly and transparently. If you have any further questions or need assistance, please contact our support team.


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