Thank you for being concise and to the point. I've always done J/E for all the transactions, so seeing it with Invoices and sales receipts is wonderful. Thank you!
Do you recommend syncing mycase with quickbooks? We need to do 3-way reconciliation which we were not initially doing . We initially thought that having mycase and reconciling the trust account to the statement using mycase would be sufficient. Also, is the trust liabilites account in QB set-up as a sub-account of the trust banking account?
@@ClaudiaXperts Can you advise on how you balance the trust liabilities account with the trust bank account when there was a small balance to establish the trust account? Basd on what Im experiencing so fr it will always be off by $100 since that was needed to establish the account.
Thank you for the video! Wondering if I am missing something because I go to the specific client and I am wanting to see how much is remaining on their account. I have created the invoice, received the payment and put in the sales receipt and their balance in still zero. They should have some of their retainer remaining. Can you let me know what I am doing wrong. Thank you!
You will need to create a Client trust liability account and when you see the deposit in the Trust bank categorize the transaction as as trust liability account. I will post a video this week on the subject stay tuned.
Started a new QB online. Put in a balance "balance forward" for customer that was incorrect. I found where a check was not charged to a customer in the bal fwd, but was reconciled in an earlier month's statement. How do I add this check to the person's trust paid outs without it showing up in the next months reconciliation.
How would I record a transaction in which the lawyer pays himself directly from the Trust account and does not transfer money into the main checking account from the Trust account. Because he does this, I'm not sure where I would put the money going out of the trust account. TIA
You will categorize the transaction as the trust so remove the liability, then you will need to do a Journal entry to record the income by crediting the income account and debiting owner’s distribution.
EXPENSE PAID (I wrote a check to the Chancery Clerk for a filing fee) will be entered just like attorney fees earned by creating a SALES RECEIPT for the client? Then choosing FILING FEE as the product then the amount; then another line choosing the RETAINER as the product and entering the same amount as a negative number. Correct?
The retainer needs to be routed to a liability account, the filing fee needs to be routed to an expense account, as long as those products are routed correctly then it should be fine. The only way to know for sure is to look at your books.
Thank you so much for this video. I am still not sure if the way things are being done on my clients books are the same. The deposit comes in from LawPay and a Sales Receipt is being written for the amount. When money goes out for Attorney Fees, all that is being done is that a Check is created in the name of the client. That is all. So I think the process is missing the part where you said that the withdrawal should should be recorded on the Sales Receipt and then the check created. Is that correct.? Some clients deposits are bulked together on the bank statements. Thanks in advance for your reply.
It is impossible for me to diagnose what is going on without going into the books. The Trust liability account should have the exact same amount is Iolta bank account. If it is not the same then the process is off.
@@lesafrank Integration can be complex and sometimes does not work properly. If you deal with Trust accounts what I said before is very important, if you don’t use trust account your income should match what your app reports as income.
hello. thank you for this video. I am trying to set up my trust account. I have the bank account - trust and the trust liability account. Do you then turn the bank account trust into a liability? that is what it seems at 4:37. thank you.
Hi Dawn, the Iolta bank account is the bank account, the transaction coming through the bank account will be categorized as Trust. The Trust is a short term liability account. The Trust account balance will match the Iolta bank account but they are two separate account Iolta bank account and Trust short term liability account.
Hi Claudia, thank you for this video. I have learned a lot. Would you mind to make more video about quickbooks for law firm. You are so helpful to people who are just starting learning quickbooks in a legal field. Thank you so much.
Am I the only one who seems like there are too many steps between 7:12 and 9:22? Why are we "transferring" it into a "Operating Checking Account" at 8:51, vs just transferring it at 7:12 when we record the receipt? Why are sending the deposit into "Petty Cash" instead of "Operating Checking Account"? Seems like this should be streamlined.
Nothing is being transferred to operating checking nor petty cash. I appreciate your impute, the minutes you mentioned 7:12 to 9:22 is how we show what is going to happened to the balance sheet because of the entry we made. Others have mentioned that they want to see what happens to the financial statements after the entries. I appreciate your input and wish you the best.
Claudia, thank you for this video. What if there are several clients and all of their retainers go into a single Trust Account? What's your suggestion so I can see clearly how much belongs to who?
You still create one Trust, but you add the customer name to each payment, so you can run a report by customer name. The balance on the Trust account should match the balance on the Iolta account, if you create a Trust for each customer, your balance sheet will be impossibly long and will not match the Iolta since it will be spread into separate accounts.
Have you dealt with trust accounting using Clio? I'm trying to set up an attorney's books right now and it seems like they only have one category that all the income goes to so it all comes over as billable hours no matter what kind of invoice it is. Not sure if I need to manually edit the invoices dealing with retainers each time or if I'm missing something...
Hi Sasha, I do not use Clio, I am familiar with Mycase and we do not link it to QuickBooks, we just enter the lump some income at the end of the month. But if you have linked Clio to QuickBooks it should generate an Invoice or sales receipt, if it generates an Invoice you will have to record the payment and the deposit when you make it. If it is a deposit you will have to manually adjust each individual Invoice with the product on the second line being the liability account Trust a negative amount to record the liability being paid.
Thank you so much for this. Do you have a video on how to receive the monies for a case that is won and then how to disperses the winnings to your client, along with any outstanding bills for representing them? Please advise. Thank you for all you do.
Yes Rebecca, the money would be recorded into the trust account them when you pay the client, it will come from the Trust account. Glad you liked the video
@@rebeccabolinger2179 You can name the product whatever makes sense to you. As long as it is routed to go to the Trust account under the name of the person who you will be distributing it to. I would call it money in trust for liquidation of property, money in trust for client’s earnings. What matter is that it will be directed to the trust account since the money is being held in behalf of your client.
Hi Claudia! Thanks for this video! I have a new Law Firm client. She just started her practice two months ago so not much going on. So we connected her Trust Acct and Operating acct on QBO. Is that how I need to set up and record? Making an invoice for the retainer, received payment? Like a fake invoice right?( not sending to the client). Thank you for your help!
Yes, and the first invoice goes to the Trust liability account, so you will need to create the Trust liability account, then click on sales on the left hand side menu, select Products and services, then set up the Retainer in Products and Services and select the income account as the Trust liability account. When you create the invoice for the retainer, which you can send to the customer to receive payment for the retainer, it will record the payment into the Trust liability account.
@@ClaudiaXperts Thank you! I did set up the Products and Services already. So I am cleaning up and categorizing all the transactions for the past two months. I need to make a "fake invoice" and receive payment to record everything, correct? I don't need to send it to the client since it's already done and the law firm is using different software for invoicing. Did I understand this right?
@@thehayesdiary That is correct, you will create the invoice to record the transaction, you can also use Sales Receipt if payment has already been received. Follow the income workflow.
First, I would like to caution viewers that the first 2:20 is spent deleting accounts and transactions to prepare for the demo. Deleting in QBO should not be done without understanding the impact. They actually do not go away! I have seen clients make a big mess of their records thinking that DELETE is the same as ERASE. Now I have a question.... How do you get the details of The Trust Account? is there some kind of an Aging report for the amounts held in Trust Account liabilities? Thank you.
First, I would not recommend to delete transactions in QuickBooks unless you know what you are doing. Second, in regards to reports, QuickBooks has no report to track Trust account, but if you go into the Balance Sheet and select the Trust Liability account you will be able to see the balance by date, you can also customize it and add other information that may be useful to track the information you need.
Excellent explanation! Thanks for the sharing. May I know how to deal with advanced payment for disbursements? and what about money held as stakeholder? thank you.
You can create a short term liability account and name Client Money Held or Deposit Held. For stakeholder you can add an Owner’s Equity Account called Owner’s Distributions. If you have a corporation name it Dividend Distributions. If it is a stakeholder’s investment called it Owner’s Investment, and you can track money invested in behalf of one of the owners.
@@ClaudiaXperts I see. But for stakeholder money held for the benefit of clients, it will be a current liability right? May I also know how to record the transaction where the stakeholder money, say a settlement sum from opponent is paid to us as the lawyer, and we want to take part of the money for legal fee and remaining to be released to the client?
Thank you for being concise and to the point. I've always done J/E for all the transactions, so seeing it with Invoices and sales receipts is wonderful. Thank you!
So glad you liked the video on accounting for attorneys.
Do you recommend syncing mycase with quickbooks? We need to do 3-way reconciliation which we were not initially doing . We initially thought that having mycase and reconciling the trust account to the statement using mycase would be sufficient. Also, is the trust liabilites account in QB set-up as a sub-account of the trust banking account?
No not at this time, it is causing too much duplication. Missing transactions as well. The integration needs improvement
No the Trust liability is not a sub account of the Iolta account. They are both independent the balance of both must be the came
@@ClaudiaXperts Can you advise on how you balance the trust liabilities account with the trust bank account when there was a small balance to establish the trust account? Basd on what Im experiencing so fr it will always be off by $100 since that was needed to establish the account.
@@tierrahobley4154 The initial investment can go owner’s equity
Thank you for the video! Wondering if I am missing something because I go to the specific client and I am wanting to see how much is remaining on their account. I have created the invoice, received the payment and put in the sales receipt and their balance in still zero. They should have some of their retainer remaining. Can you let me know what I am doing wrong. Thank you!
You will need to create a Client trust liability account and when you see the deposit in the Trust bank categorize the transaction as as trust liability account. I will post a video this week on the subject stay tuned.
Started a new QB online. Put in a balance "balance forward" for customer that was incorrect. I found where a check was not charged to a customer in the bal fwd, but was reconciled in an earlier month's statement. How do I add this check to the person's trust paid outs without it showing up in the next months reconciliation.
this is for the trust account
Do a journal entry to reverse the wrong check, then add the correct one.
@@ClaudiaXperts OK
How would I record a transaction in which the lawyer pays himself directly from the Trust account and does not transfer money into the main checking account from the Trust account. Because he does this, I'm not sure where I would put the money going out of the trust account. TIA
You will categorize the transaction as the trust so remove the liability, then you will need to do a Journal entry to record the income by crediting the income account and debiting owner’s distribution.
EXPENSE PAID (I wrote a check to the Chancery Clerk for a filing fee) will be entered just like attorney fees earned by creating a SALES RECEIPT for the client? Then choosing FILING FEE as the product then the amount; then another line choosing the RETAINER as the product and entering the same amount as a negative number. Correct?
The retainer needs to be routed to a liability account, the filing fee needs to be routed to an expense account, as long as those products are routed correctly then it should be fine. The only way to know for sure is to look at your books.
Thank you so much for this video. I am still not sure if the way things are being done on my clients books are the same. The deposit comes in from LawPay and a Sales Receipt is being written for the amount. When money goes out for Attorney Fees, all that is being done is that a Check is created in the name of the client. That is all. So I think the process is missing the part where you said that the withdrawal should should be recorded on the Sales Receipt and then the check created. Is that correct.? Some clients deposits are bulked together on the bank statements. Thanks in advance for your reply.
It is impossible for me to diagnose what is going on without going into the books. The Trust liability account should have the exact same amount is Iolta bank account. If it is not the same then the process is off.
@@ClaudiaXperts thank you for your reply.
@@lesafrank Integration can be complex and sometimes does not work properly. If you deal with Trust accounts what I said before is very important, if you don’t use trust account your income should match what your app reports as income.
THANK YOU THANK YOU THANK YOU! This video made my day and will save me a lot of time!
So glad to hear, that’s why I make them!
Helped me SOOOO much, too!
hello. thank you for this video. I am trying to set up my trust account. I have the bank account - trust and the trust liability account. Do you then turn the bank account trust into a liability? that is what it seems at 4:37. thank you.
Hi Dawn, the Iolta bank account is the bank account, the transaction coming through the bank account will be categorized as Trust. The Trust is a short term liability account. The Trust account balance will match the Iolta bank account but they are two separate account Iolta bank account and Trust short term liability account.
Hi Claudia, thank you for this video. I have learned a lot. Would you mind to make more video about quickbooks for law firm. You are so helpful to people who are just starting learning quickbooks in a legal field. Thank you so much.
You are very welcome. Sure I will do it!
Am I the only one who seems like there are too many steps between 7:12 and 9:22?
Why are we "transferring" it into a "Operating Checking Account" at 8:51, vs just transferring it at 7:12 when we record the receipt? Why are sending the deposit into "Petty Cash" instead of "Operating Checking Account"?
Seems like this should be streamlined.
Nothing is being transferred to operating checking nor petty cash. I appreciate your impute, the minutes you mentioned 7:12 to 9:22 is how we show what is going to happened to the balance sheet because of the entry we made. Others have mentioned that they want to see what happens to the financial statements after the entries. I appreciate your input and wish you the best.
@@ClaudiaXperts got it. Seems like there should be a simpler button. But Quickbooks is known for making us work harder for no apparent reason.
@@ClaudiaXperts good video though.
@@cordelearts Yes, you are right. QuickBooks workflow can be a little overwhelming for many business owners.
@@cordelearts I really appreciate that!!
Claudia, thank you for this video. What if there are several clients and all of their retainers go into a single Trust Account? What's your suggestion so I can see clearly how much belongs to who?
You still create one Trust, but you add the customer name to each payment, so you can run a report by customer name. The balance on the Trust account should match the balance on the Iolta account, if you create a Trust for each customer, your balance sheet will be impossibly long and will not match the Iolta since it will be spread into separate accounts.
Very well explain Mam. Love the way you explain it. Please make a full tutorial on Attorney bookkeeping which cover all the aspect. Thanks in advance.
I will Muhmmad, thanks for your imput
@@ClaudiaXperts Thanks for your response. Waiting for your next tutorial.Alot of love to you Mam. God bless you with good health.
Any videos for P&C insurance agencies
Not specifically for insurance agency but any video should work.
Have you dealt with trust accounting using Clio? I'm trying to set up an attorney's books right now and it seems like they only have one category that all the income goes to so it all comes over as billable hours no matter what kind of invoice it is. Not sure if I need to manually edit the invoices dealing with retainers each time or if I'm missing something...
Hi Sasha, I do not use Clio, I am familiar with Mycase and we do not link it to QuickBooks, we just enter the lump some income at the end of the month. But if you have linked Clio to QuickBooks it should generate an Invoice or sales receipt, if it generates an Invoice you will have to record the payment and the deposit when you make it. If it is a deposit you will have to manually adjust each individual Invoice with the product on the second line being the liability account Trust a negative amount to record the liability being paid.
Very useful. Thank you so much for making this video
You are most welcome
Clearly explained. Thank you.
I am glad you liked!!
Thank you so much for this. Do you have a video on how to receive the monies for a case that is won and then how to disperses the winnings to your client, along with any outstanding bills for representing them? Please advise. Thank you for all you do.
Yes Rebecca, the money would be recorded into the trust account them when you pay the client, it will come from the Trust account. Glad you liked the video
So if they do it to retain the lawyer it is put in as a retainer. If it is the winnings from a case, what is it entered as in the product/service?
@@rebeccabolinger2179 You can name the product whatever makes sense to you. As long as it is routed to go to the Trust account under the name of the person who you will be distributing it to. I would call it money in trust for liquidation of property, money in trust for client’s earnings. What matter is that it will be directed to the trust account since the money is being held in behalf of your client.
@@ClaudiaXperts I have subscribed to your channel. I appreciate how you break things down.
@@rebeccabolinger2179 you are very welcome!
Hi Claudia! Thanks for this video! I have a new Law Firm client. She just started her practice two months ago so not much going on. So we connected her Trust Acct and Operating acct on QBO. Is that how I need to set up and record? Making an invoice for the retainer, received payment? Like a fake invoice right?( not sending to the client). Thank you for your help!
Yes, and the first invoice goes to the Trust liability account, so you will need to create the Trust liability account, then click on sales on the left hand side menu, select Products and services, then set up the Retainer in Products and Services and select the income account as the Trust liability account. When you create the invoice for the retainer, which you can send to the customer to receive payment for the retainer, it will record the payment into the Trust liability account.
@@ClaudiaXperts Thank you! I did set up the Products and Services already. So I am cleaning up and categorizing all the transactions for the past two months. I need to make a "fake invoice" and receive payment to record everything, correct? I don't need to send it to the client since it's already done and the law firm is using different software for invoicing. Did I understand this right?
@@thehayesdiary That is correct, you will create the invoice to record the transaction, you can also use Sales Receipt if payment has already been received. Follow the income workflow.
@@ClaudiaXperts Thank you so much! I appreciate your help!
First, I would like to caution viewers that the first 2:20 is spent deleting accounts and transactions to prepare for the demo. Deleting in QBO should not be done without understanding the impact. They actually do not go away! I have seen clients make a big mess of their records thinking that DELETE is the same as ERASE. Now I have a question.... How do you get the details of The Trust Account? is there some kind of an Aging report for the amounts held in Trust Account liabilities? Thank you.
First, I would not recommend to delete transactions in QuickBooks unless you know what you are doing. Second, in regards to reports, QuickBooks has no report to track Trust account, but if you go into the Balance Sheet and select the Trust Liability account you will be able to see the balance by date, you can also customize it and add other information that may be useful to track the information you need.
You should have cleaned up QB prior to hitting record
Thanks for the feedback
Excellent mini tutorial. Thank you!
You are so welcome!
❤ ire video about lawyer’s
I am so glad you liked the tutorial for Attorneys Trust account.
Excellent explanation! Thanks for the sharing. May I know how to deal with advanced payment for disbursements? and what about money held as stakeholder? thank you.
You can create a short term liability account and name Client Money Held or Deposit Held. For stakeholder you can add an Owner’s Equity Account called Owner’s Distributions. If you have a corporation name it Dividend Distributions. If it is a stakeholder’s investment called it Owner’s Investment, and you can track money invested in behalf of one of the owners.
@@ClaudiaXperts I see. But for stakeholder money held for the benefit of clients, it will be a current liability right? May I also know how to record the transaction where the stakeholder money, say a settlement sum from opponent is paid to us as the lawyer, and we want to take part of the money for legal fee and remaining to be released to the client?
@@hs_lawyer Yes, that is right, money held for a client is a liability. Watch my last video, it will make sense.
Thank you.
You are welcome!