FAQs for Self-Migrated Financial Data

If you wish to migrate your financial data on your own, find answers to all your FAQs here.

• How do I prepare for financial migration?
• Should I migrate the entire billing and accounting history from my old system?
• How do I get the billing and accounting data out of my old system?
• How detailed do I have to be when reviewing the data that came out of my old system?
• How do I set up CosmoLex for financial migration? 
• How do I import:
  • Operating bank balances
  • Uncleared checks and deposits from Operating
  • Trust bank balances
  • Uncleared checks and deposits from Trust
  • Matter Operating Retainer/Credit balances
  • Accounts Receivable
  • Unbilled costs (Disbursement and Cost Recovery WIP)
  • Unbilled fees/time (Fee WIP)
  • Unpaid AP bills
  • Credit card balances
  • GL account balances (trial balance)
• Why do I have to import my hard costs (disbursements) as soft costs?
• What are the consequences from hard costs importing as soft costs?
• If I’m on accrual basis, are there any additional steps I must perform during migration?
• 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. 

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. If you do decide to import the older data, we recommended that you use CosmoLex’s financial data migration service. Click here to learn more about CosmoLex’s financial data migration service. 

How do I get the billing and accounting data out of my old system? 

You must talk to support at your old legal accounting program to find out how to extract the data you need. If you use CosmoLex’s financial data migration service, we will extract the data for you. Click here to learn more about CosmoLex’s financial data migration service. 

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. 

How do I set up CosmoLex for financial migration? 

• Your non-financial data (Client & Matter information) must be successfully migrated into CosmoLex first. 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 
    • Setup 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. 

I’m doing my migration manually, how do I import: 

To import data manually, download the Financial Data Import Template. Enter the extracted data into the appropriate sheet in the template. If you have any questions about the data that goes into each field in the sheet, consult the “Data Entry Instructions” which appear on the first sheet in the template. 

You may keep all your data in the one template. You will import each sheet separately into CosmoLex by going to the “+” sign in the top right corner of the CosmoLex screen and clicking on “Other > Import Data” and then selecting the appropriate option for data sheet that you are importing. 

Operating bank balances 

Operating bank balances must be entered manually into CosmoLex by going to Accounting > Bank > Operating Bank > Add > Deposit and putting 3100 Opening Balance Equity as the GL account. 

You cannot use the book ending balance from your old system as the opening bank balance entry in CosmoLex. Instead, you must calculate the opening bank balance as follows. 

• • • Take the book ending balance from your old system 
    • Add in the total amount of the uncleared checks 
    • Subtract out the total amount of uncleared deposits, and 
    • Subtract out the total amount of Operating Retainers to be imported 

Uncleared checks and deposits from Operating 

In the Financial Data Import Template, go to the “Bus Uncleared Trans” tab and enter all uncleared checks and each uncleared deposit. To import, go to Accounting > Bank > Operating Bank > Action > Import Transactions. 

It has been our experience that most bookkeepers handle the uncleared checks as follows, but, as always, we recommend talking to your accountant prior to assigning GL accounts as they may want you to do something different with these transactions:  

• • If the uncleared check or deposit is dated before the last day of the month prior to your migration, you put 3100 Opening Balance Equity as the “Account” for those transactions. 

• • For the remainder of the uncleared checks and non-invoice payment deposits that were entered after the last day of the month prior to your migration, you put the actual GL account(s) as the “Account”. 
  • For the uncleared deposits that were entered after the last day of the month prior to your migration and are made up of payments on invoices that are part of the AR migration, you wait until after the AR migration occurs and manually enter each payment on the invoice and create any necessary deposit slips. 

Trust bank balances 

Complete the “Trust Balances” sheet in the Financial Data Import Template. Each trust balance must be associated with a matter. For interest or minimal attorney funds kept in trust to cover bank fees, you must create a “firm” matter and associate those trust funds with it. 

You may not be able use the trust ledger balance from your old system as the opening trust balance entry in CosmoLex. If the matter trust account has uncleared checks or uncleared deposits, you must calculate the opening trust balance as follows. 

• • Take the matter trust balance from your old system 
  • Add in the total amount of the uncleared checks for that matter, and 
  • Subtract out the total amount of uncleared deposits for that matter 

To import, go to the “+” sign in the top right corner of the CosmoLex screen and click on “Other > Import Data” and select “Import Trust Balance Data”. 

Uncleared Checks and Deposits from Trust 

Complete the “Trust Uncleared from Bank” sheet in the Financial Data Import Template. Each trust balance must be associated with a matter. You do not have to assign a chart of account to these transactions because the system will automatically use the default GL account assigned to trust transactions in Setup > Firm Settings > Accounting. 

To import, go to Accounting > Bank > Trust Bank > Action > Import Transactions. 

Matter Operating Retainer/Credit balances 

Complete the “Operating Retainer” sheet in the Financial Data Import Template. Each operating balance must be associated with a matter. 

To import, go to the “+” sign in the top right corner of the CosmoLex screen and click on “Other > Import Data” and select “Import Operating Retainer Transaction Data” 

Accounts Receivable 

Complete the “AR” sheet in the Financial Data Import Template. Each AR must be associated with a matter and a specific invoice. You may break out the fees and costs so that the system will track those separately. All fees on the matter get assigned to one timekeeper regardless of what the original timekeepers’ portions were.  If you don’t assign a timekeeper to the invoice the system will use the default timekeeper for the matter. The costs will be imported as soft costs. 

To import, go to the “+” sign in the top right corner of the CosmoLex screen and click on “Other > Import Data” and select “Import Accounts Receivable Data”.

Unbilled costs (Disbursement and Cost Recovery WIP) 

Complete the “Expenses” sheet in the Financial Data Import Template. Enter “Hard Cost” into the notes column for those expenses that were originally tied to a banking transaction, e.g. were originally disbursements. This will allow you to create a list of all imported hard costs (disbursements) after import. If you don’t assign a timekeeper to the expense the system will use the default timekeeper for the matter. All expense entries will be imported as soft costs regardless of whether you put “Hard Cost” in the notes or not. 

To import, go to the “+” sign in the top right corner of the CosmoLex screen and click on “Other > Import Data” and select “Import Time/Expense (Work in Progress)” 

Unbilled fees/time 

Complete the “Time” sheet in the Financial Data Import Template.  

To import, go to the “+” sign in the top right corner of the CosmoLex screen and click on “Other > Import Data” and select “Import Time/Expense (Work in Progress)”. 

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. 

• • 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) 

• • 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

 

• • • 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. 

Why do I have to import my hard costs (disbursements) 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).  

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. 

If I’m on accrual basis, are there any additional steps I must perform during migration? 

If you have performed your own data migration, then before you migrate in your GL balances, you will need to back out certain GL balances that are an artifact of the AR migration. To do this: 

• If you’ve made the Journal Entry to bring over your GL balances, temporarily move the date of the Journal Entry to the current date. 
• Print your trial balance as of the last day of the month prior to your going live in CosmoLex. 
• Do the following entry using the GL balances for the accounts below from the trial balance you just printed: 

Account	Debit	Credit
2201 Taxes Paid/Collected – Taxes Collected	5,385
3400 Retained Earnings	103,304
4000 Fee Income	62,500
4125 Discounts		11,624
4250 Reimbursed Client Costs (Indirect)	2,685
3100 Opening Balance Equity		160,250
Total	173,874	173,874

  

• Reprint the trial balance in CosmoLex and make sure all GL accounts are $0 except for Operating Bank Account Balances, AR, Trust Balances, and Opening Balance Equity. 

How can I verify that my data imported correctly? 

• 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).