- How do I prepare for financial migration?
- How do I set up CosmoLex for financial migration?
- Should I migrate the entire billing and accounting history from my old system?
- What data is brought into CosmoLex by the migration team?
- How detailed do I have to be when reviewing the data that came out of my old system?
- How do I migrate AP, Credit Card, and GL balances since CosmoLex Migration doesn’t do that for me?
- Why are my hard costs (disbursements) imported as soft costs?
- What are the consequences from hard costs importing as soft costs?
- Will CosmoLex’s data migration team bring in my GL balances?
- How can I verify that my data imported correctly?
Answers to Migration FAQs
How do I prepare the data in my old system for financial migration?
- Clean up your trust and operating bank accounts:
- Void stale-dated, uncleared checks and deposits, if applicable
- Confirm you have entered all current transactions
- Create any entries necessary to correct errors
- Clean up your credit card accounts:
- Void uncleared credit card charges and payments, if applicable
- Confirm you have entered all current transactions
- Create any entries necessary to correct errors
- Review and clean up your trust matter balances:
- Review the client trust ledger report to ensure all client trust balances are accurate as of the last day of the month prior to your migration
- Make the necessary entries to correct any errors you find
- Review and clean up operating retainers, unapplied payments, and credit notes:
- If appropriate, apply these funds to client invoices with balances due
- Remove all erroneous operating retainers, unapplied payments and credit notes
- Clear out your Accounts Payable:
- Either pay all the unpaid bills, or
- Remove the unpaid bills from the system and manually re-enter them into CosmoLex
- See if you have any of the following data issues in your old system, determine what caused them to appear, and then fix it so these issues go away:
- Negative accounts receivable
- Negative expense cards
- Negative timecards
- Negative trust balances
- Review AR Balances:
- Determine which AR balances are to be brought into CosmoLex
- Make sure you include archived matters with AR balances a part of your review
- Perform write-offs where applicable, after discussion with your accountant about financial reporting impacts
- If you are unable to write off archived AR balances and choose not to migrate those balances into CosmoLex, be sure to discuss with your accountant the impacts this decision will have on your future financial reporting.
- Resolve all General Ledger (GL) discrepancies:
- If your current system has a GL reconciliation function to help you find and clear discrepancies, use it. (Applies to PCLaw users)
- In all other systems, check GL balances for discrepancies and fix them
- Reconcile all credit card, operating, and trust bank accounts through the last day of the month prior to your migration.
How do I set up CosmoLex for financial migration?
- Your non-financial data (Client & Matter information) must be successfully migrated into CosmoLex. Click here to learn more about CosmoLex’s migration services.
- Set up the following items in CosmoLex (can be done upon the client’s request and as part of CosmoLex’s migration services):
- Timekeepers (Setup > Timekeepers)
- Matter Owner’s (Setup > Matter Owners)
- Bank Accounts (Accounting > Banks)
- Make your default financial selections (Setup > Firm Settings > Financial)
- Make your Regional Preference selections (if in Canada)
- Make your Firm Preferences selections (Setup > Firm Settings > Firm Preferences)
- Make your Accounting Preference selections (Setup > Firm Settings > Accounting Settings)
- Set the default General Ledger accounts to be used for specific accounting activities
- Choose your reporting method
- Set up your financial year information
- Select appropriate client cost account by billing type.
- Customize your Chart of Accounts (Accounting > Chart of Accounts)
- Click here for more information about customizing your Chart of Accounts in CosmoLex.
- Must be completed by user as it is not part of the data migration services.
Should I migrate the entire billing and accounting history from my old system?
You can migrate your entire billing and accounting history from your old system, but it is a very complicated process. We recommend that you talk to your bookkeeper or accountant about the advisability of importing the historical data.
What data is brought into CosmoLex by the migration team?
CosmoLex’s migration team migrates the following:
- Accounts Receivable General Ledger balances (by importing all outstanding, unpaid invoices)
- All fee and disbursement WIP by (by importing unbillled time and expense cards)
- Trust bank balances (by importing all matter trust ledger balances and all cleared and uncleared deposits and withdrawals for those matters)
- Operating bank balances and all uncleared deposits and withdrawals
- Credit Card balances and all uncleared credit card transactions
Users must manually enter all other remaining General Ledger account balances.
How detailed do I have to be when reviewing the data that came out of my old system?
If you’ve prepared your data properly by cleaning up your old system, the review should be easy and you shouldn’t have to spend much time looking at the detailed records being imported. Failure to clean-up your work-in-progress, disbursements, and accounts receivable in your old system can cause you to spend significant time reviewing the import file details in order to track down and resolve discrepancies and other issues prior to migration.
Changes to AR, WIP, uncleared checks, etc. in the excel spreadsheets can cause imbalances between the trial balance from the old system and opening trial balance in CosmoLex. You can minimize the need to make data changes in the import spreadsheets, by cleaning up the data in your old system, closing out all months and all years and making sure that there are no GL discrepancies prior to the data being extracted.
How do I migrate AP, Credit Card, and GL balances since CosmoLex Migration doesn’t do that for me?
Unpaid AP bills
Go to Accounting > Accounts Payable > Add > Bill and enter each outstanding AP bill manually.
If you want to enter all of your AP in one lump entry and not track each AP bill individually, you will need to create a separate GL account for “accounts payable from old system” and enter the outstanding AP balance to that GL account. You will have to track the AP bills that make up the GL balance outside of CosmoLex and make sure you post payments on those bills to the GL account you created.
Credit card balances
Credit Card balances must be entered manually into CosmoLex by going to Accounting > Bank > Credit Card Bank > Add > Credit and putting 3100 Opening Balance Equity as the GL account.
You cannot use the book ending balance from your old system as the opening credit card balance entry in CosmoLex. Instead, you must calculate the opening credit card balance as follows:
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-
- Take the book ending balance from your old system
- Add in the total amount of the uncleared charges, and
- Subtract out the total amount of uncleared payments
-
You can enter the uncleared credit card charges and payments into a separate excel file and upload them by going to Accounting > Bank > Credit Card Bank > Action > Import Transactions.
GL account balances (trial balance)
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-
- Go to Accounting > Journal Entry > Add and do a journal entry bringing over the remaining general ledger account balances. (Each GL line item will be offset against the 3100 Opening Balance Equity GL account, but you may aggregate and only do one final offsetting entry to the 3100 GL account at the end of the Journal Entry if it’s easier.)
-
Sample GL Balance Migration Journal Entry – Offsetting Entry Per Line Item
|
Account |
Debit |
Credit |
|
1700: Advanced Client Costs |
10,000 |
|
|
3100: Opening Balance Equity |
|
10,000 |
|
1620: Furniture and Equipment |
72,830 |
|
|
3100: Opening Balance Equity |
|
72,830 |
|
2500: Line of Credit |
|
2,999 |
|
3100: Opening Balance Equity |
2,999 |
|
|
Total |
85,829 |
85,829 |
Sample GL Balance Migration Journal Entry – Aggregate Final Offsetting Entry
|
Account |
Debit |
Credit |
|
1700: Advanced Client Costs |
10,000 |
|
|
1620: Furniture and Equipment |
72,830 |
|
|
2500: Line of Credit |
|
2,999 |
|
3100: Opening Balance Equity |
|
82,830 |
|
Total |
85,829 |
85,829 |
Normally you would do one giant journal entry bringing over all GL balances that appear on your Trial Balance, except for AR and trust bank and liability account balances. In CosmoLex, however, you cannot select a bank or credit card account when doing a Journal Entry. So, the operating bank and credit card opening balances entries have to be made as a bank transaction and are offset against “Opening Balance Equity”. To make the Opening Balance Equity go to $0, you must offset all other GL account balance entries against Opening Balance Equity as well.
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-
- If all data has migrated cleanly, the Opening Balance Equity should go to $0. If it is not $0, you will have to find the entries that created the discrepancies and fix them. Most discrepancies are caused by changes the user made to data after extraction from the old system but prior to migration into CosmoLex. We recommend consulting your bookkeeper/accountant if the opening balance equity is not $0.
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Why are my hard costs (disbursements) imported as soft costs?
In CosmoLex a hard cost (disbursement) is just a matter expense card that has been linked to a banking transaction. When you import a hard cost (disbursement) into CosmoLex, the expense card is brought in separately from the banking transaction.
If the banking transaction in your old system is still uncleared, it will be imported as a banking transaction into CosmoLex, and you will have to manually link each unbilled expense card to each banking transaction one by one. If you have a huge number of uncleared bank transactions that need to be linked to imported expense cards, this can be a huge undertaking. (This is why our migration team likes to migrate financials as early in the month as possible in order to limit the number of transactions you will have to manually link to expense cards.)
Complications arise when the banking transaction associated with the unbilled hard cost (disbursement) has cleared the bank. Cleared bank transactions are not imported into CosmoLex. This means that there is no bank transaction to link with the expense card so the hard cost (disbursement) is tracked as a soft cost by CosmoLex.
What are the consequences of the hard costs importing as soft costs?
In CosmoLex, soft costs do not impact the General Ledger until they are invoiced to the client (accrual basis) or are reimbursed by the client (cash basis).
- If your books are kept on an accrual basis, when you invoice the soft cost to your client, the system automatically debits 1200 Accounts receivable and credits the 4250 Client Costs Reimbursable (Indirect) GL accounts.
- If your books are kept on a cash basis, when the client pays the soft cost, the system automatically debits your bank account and credits the 4250 Client Costs Reimbursable (Indirect) GL accounts.
This means that all imported disbursements will affect the Profit & Loss (Income Statement) rather than the Balance Sheet.
If your Disbursement Recovery GL was on your balance sheet in your prior system, then you can enter the balance of that account into the 1700 Advanced Client Costs GL in CosmoLex.
Because the imported disbursements were imported into CosmoLex as Soft Costs, however, the system will not automatically reduce the 1700 GL by the amount of the invoiced (accrual) or reimbursed (cash) soft costs and you will have to manually track the disbursement recoveries and do a journal entry reducing the 4250 GL and the 1700 GL accordingly.
Will CosmoLex’s data migration team bring in my GL balances?
Yes, for AR, Trust Account Balances, and Operating bank account balances. The remaining GL balances, with the exception or AP, are only brought in if there are no GL discrepancies, no AP, and everything has been reconciled with all years and months closed. Otherwise, you will have to import your GL manually per the instruction in how to import GL balances.
How can I verify that my data imported correctly?
It’s best to complete this step before you, or CosmoLex’s data migration team makes the Journal Entry that brings over your remaining GL balances. Otherwise, you will have to temporarily change the date of the Journal Entry, and then change it back after you’ve verified the import.
- Print your trial balance from your old system as of the date of your final reconciliation in that system.
- Print your trial balance from CosmoLex.
- Make sure all GL accounts are $0 except for Operating Bank Account Balances, AR, and Trust Balances on both reports match. (You will need to resolve any discrepancies you find.)