Unbilled Disbursements

What are unbilled disbursements?

Unbilled disbursements are client expenses the firm has already paid but not yet invoiced. The money has left your bank account; the client has not been asked to repay it. Filing fees, expert fees, travel, and court costs all sit in this category until billed. Unlike unbilled time, these are real cash outflows, which makes a growing balance a direct drain on working capital.

How the balance builds without anyone noticing

Expenses enter the system through credit card statements, vendor invoices, and expense reports, often weeks after they occur and sometimes without a matter number attached. If billing runs on a monthly cycle, costs incurred late in a cycle wait for the next one. Unassigned costs wait indefinitely. A firm fronting significant expert and filing fees can carry a balance equal to several weeks of revenue and treat it as normal.

Getting the cash back faster

Require a matter number on every expense submission and reject those without one. Post costs within days, not at month end. Run an unbilled disbursement aging report alongside your WIP report and review both. For large anticipated costs, collect an advance from the client or have them pay the vendor directly. The best disbursement is the one you never financed in the first place.