Discounts Overview

How Brightflag Collects and Records Discounts

LEDES Submissions

LEDES submissions provide two standardized methods for applying discounts, ensuring the most accurate processing:

1. Using "IF" as an Adjustment

   • Apply a negative value in the "IF" (Invoice Adjustment) field.
   • Include a description to explain the adjustment. This appears as its own line.

2. Inline Adjustment

   • Use the LINE_ITEM_ADJUSTMENT_AMOUNT field to enter a negative value directly.
   • This adjustment appears on the same line as the associated cost.

PDF Submissions

When a firm submits a PDF invoice:

• Discounts must be included directly on the invoice or entered during the invoice submission process.
• During AI Processing, discounts are extracted and displayed on the invoice review page under the invoice total breakdown.

Volume Trade Discounts (VTDs)

For firms with Volume Trade Discounts enabled, Brightflag can verify that agreed-upon discounts are correctly applied.

Key Features of VTD Functionality

1. Discount Verification

   • This functionality will NOT apply a discount to an invoice but will instead check to ensure that a firm has applied the correct Volume Trade Discount.

2. Configuration Options

   • VTDs are managed on the Vendor Management page, allowing flexibility to create discount bands.

   Example:

   • Spend $0–$1M = 10% discount
   • Spend over $1M = 15% discount

   VTD Configuration Example:

   • For Firm A: Spend $0–$1M = 10% discount.
   • For Firm A: Spend over $1M = 15% discount.

Configuring VTDs

When setting up a VTD, you must select a fee type to calculate thresholds:

1. Fees Minus Discount

   • Net fees only, excluding expenses, taxes, and discounts.

2. Gross Total Minus Adjustments

   • Includes adjusted totals, excluding expenses and taxes.

3. Gross Total Minus Tax

   • Includes gross totals, excluding only taxes and expenses.

Important Notes

• VTDs apply only to fees, not expenses.
• Discounts are assessed based on the invoice date and must fall within the configured date range.

New Discount Features

Automatically Recalculating a Discount

If a vendor is configured with a Volume Trade Discount and adjustments are made on an invoice, Brightflag can automatically recalculate the discount to ensure it matches the VTD percentage. This feature is particularly helpful if an invoice is being adjusted and approved, ensuring the discount does not exceed the configured VTD.

Important Note:
This feature must be enabled on the back-end by Brightflag Tech Support. Notify your Brightflag CSM if you would like to enable this feature.

When and How Will Brightflag Automatically Recalculate a Discount?

Brightflag automatically recalculates discounts in the following scenarios:

1. Flags

   • When an invoice is adjusted through the toggling of flags, the discount will automatically recalculate to match the configured VTD percentage.
     Example:
   • An invoice with $1,000 in net fees has a 10% VTD. A $250 reduction toggles a flag, recalculating the discount to $75 (10% of $750). The total is now $675.

2. Invoice-Level Adjustments
   Example:

   • An invoice with $1,000 in net fees and a 10% VTD is reduced by $250 at the invoice level. The discount recalculates to $75, reducing the total to $675.

3. Line-Item Adjustments
   Example:

   • An invoice with $1,000 in net fees has a line item reduced by $100. The 10% VTD recalculates to $90, making the total $810.

4. Combination of Adjustments
   Example:

   • An invoice with $1,000 in net fees has a flag adjustment of $250, reducing the total to $750 and recalculating the discount to $75. Additional line-item adjustments reduce fees to $600, recalculating the discount to $60 and bringing the total to $540.

Recalculation Formula

Recalculated VTD Amount = ([total fees] - [adjustments]) * [VTD %]

This means that the ultimate gross total of a given invoice will be determined using the following formula:

([total fees] - [adjustments]) - [Recalculated VTD Amount] + [expenses] + [taxes] = Total to pay

Manually Editing a Discount

Brightflag now allows users to adjust a discount at the Invoice Level. This is especially useful when:

• A firm submits an invoice that is missing or has an incorrect discount.
• A reviewer adjusts the invoice, invalidating the initial discount.

Example:

• An invoice with $1,000 in net fees and a 10% VTD ($100 discount) is adjusted to $750. The reviewer must manually update the discount to $75 to avoid over-discounting.

Reviewer Notes

• A note explaining the adjustment is required and appears under the History section of the invoice.
• This note is visible only internally. Comments for vendors must be added separately in the approval or rejection note.

Important Notes

• Adjusting discounts does not affect flags applied during AI Processing.
• Flags remain static even if a discount becomes inaccurate after adjustments.

Upcoming Discount Features

Brightflag is developing additional discount functionalities, including:

1. The ability to exclude specific matters from the VTD feature (e.g., AFAs or Fixed Fees).
2. Currency selection for Volume Trade Discounts.
3. Configuration of discount date ranges using billing period start or end dates.

Brightflag will notify users once these features are available.