Thanks so much for this video. I am a property manager and many of the same principles apply to us since we handle rent, repairs & proceeds for our clients. I have also watched several videos and this by far was the clearest most straightforward explanation of how we can properly bill & record our property management fees with the client. My next step is figuring out how to 1099 them.
@LeanLaw
3 жыл бұрын
Glad it was helpful! Most of our client's are law firms but we do have a slew of non legal professional service organizations and property management entities.
@Harbourfronttax
5 жыл бұрын
Awesome. As a bookkeeper, I've probably watched over 200 KZitem videos on QuickBooks Online for various topics. This , by far, was the Best video EVER. Thank you for this.
@LeanLaw
5 жыл бұрын
Thank you thank you! Did you know that LeanLaw Accounting Pros get a free seat on the software, Tier 2 support, and REFERRALS? Check us out: www.leanlaw.co/accounting-partners/
@LeanLaw
4 жыл бұрын
Thanks so much for such a great reply!
@Lorgayle1
Жыл бұрын
I am a new bookkeeper for a small law firm in Ontario. The accountant had set up QBO as follows: Each client has their own liabilities sub account, under the trust liabilities account. Then we record the trust deposit to the trust account, and credit the clients liability account, along with all the information you included in your demo. Now CLIO is synced with QBO and we now receive Journal entries that debit the trust bank account and credit the trust liabilities account. It's supposed to save time by syncing, but I end up needing to delete that journal entry and replace it with a deposit entry. I had been editing the JE by changing the credit to the sub account for the client. The problem is, the JE do not show up on the saved Cash Receipts Journal report. How can I know what is acceptable to the LSO?
@LeanLaw
Жыл бұрын
What's most important for the Law Societies, is having a unique ledger for each trust client. From LeanLaw's interpretation, your accountant correctly setup QBO to structurally compliant with our understanding of the Law Societies guidance. The challenge is that Clio keeps it's ledger information in it's own application, only sending a single line item to the trust liability ledger. This inherently will create the need to use JE to move items from the top level to a specific client ledger. LeanLaw automates this process, and will sync with the client subledgers. We want to be cautious in directing journal entries as that isn't a known, and acceptable pathway for a LeanLaw client, or an an law firm managing their trust independent of a financial managing tool such as LeanLaw. We're not trying to dodge the question, we just don't want to represent what we don't know. Our advice is to either disconnect the trust activity from Clio and managing independently, reconciling at the end of the month, or seek guidance from the Law Society.
@Lorgayle1
Жыл бұрын
@@LeanLaw I appreciate your quick and honest response. I'm going to reach out to the Law Society to confirm my process.
@LeanLaw
Жыл бұрын
@lorgayle1, please let us know your findings.
@stephanieweitzman
4 жыл бұрын
This was great I have been waiting for a video like this for years. What do you do with Interest Payments from the IOLTA? Do you make that as a sub liability "IOLTA Interest" as well? Further, what do you do when the bank charges you for wires from the IOLTA? thanks!
@LeanLaw
4 жыл бұрын
You can make a specific sub-ledger for fees and interest as the interest is simple money in/money out. The same happens for the bank fees as it's the law firm's responsibility to cover those fees. I will state that you should always check with the State's Bar association to ensure you are following the specific procedure. The Bar Association will always be helpful in ensuring you have the right information to adhere to the State's rules.
@tonidonovan3793
4 жыл бұрын
Do you have a tutorial for Quickbooks desktop? I am setting up the Trust Account as a separate account from my checking account and also need to be able to reconcile my bank statement. Thank you.
@LeanLaw
4 жыл бұрын
Hello Tonu, we don't have any information as to best practices in QuickBooks Desktop as we don't support that product. LeanLaw only integrates and works with QuickBooks online. With that said, the accounting principals should apply. Thanks for watching!
@garrettkuczynski1501
5 жыл бұрын
Hello, QBO has just created a limit on accounts you can create in your COA. We are trying to think of another way to set up the trust liability accounting. Do you think invoicing the trust liability accounts could work?
@LeanLaw
5 жыл бұрын
As we assessed alternative methods as to not leverage the chart of accounts, we always ended up circling back to our core beliefs as to how we architected the trust management as it relates to QBO. Here's how we approached understanding the problem: What if LeanLaw moved to a single liability ledger in QBO. We would have to store the ledgers in LeanLaw, thus breaking from our belief that QBO is the source of truth. Technically, it would be very difficult with the QBO API, to represent client/matter trust accounts in LeanLaw. Our clients need a simple ledger as to what they're holding on behalf of their clients. What does our client's current client's chart of accounts look like? What burden is the liability ledgers? When we looked at our client base and assess their chart of accounts, we found that many of the folks had a rather sloppy chart of accounts with many inactive items. Lot's of expenses. Thus, we felt that cleaning the chart might alleviate some of the burdens. What do the Bar Associations state relative to compliance? If you dig into the compliance rules, you will see specific mentions to the handling and reconciliation of the trust money. This would be VERY difficult if you were trying to manage this in QBO by simply tagging an entry to a client with a top level trust liability. Reports would be custom and very difficult for the lay user, and we would worry as to how the 3rd step of the 3-way trust reconciliation, making sure the money went into the right client/matter accounts, would be executed? If we don't have the money in and out in specific ledgers, how do you validate that you accounted for the money in an accurate way? Most folks would go back to Excel and not have the information in one place. Our decision to not change our approach is rooted in the importance of accuracy, data completeness, compliance. Yes, technically there are ways to achieve all of these without the use of trust ledgers, but for the majority of law firms not using our model would result in manual work with a high chance of inaccuracy. Their compliance and accountability to their client are worth the extra cost. Some lawyers won't get that, and focus on spending more money. We expect some churn in LeanLaw, but we would rather err on the side of compliance and be more expensive. Poor handling of trust money is far costlier than the upgraded QBO pricing. In the weeks to come, LeanLaw will be putting better tools in place to close trust matters and make inactive the liability accounts. We need to help there. We also expect to coach our users and accounting partners.
@technician006
3 жыл бұрын
PERSONAL INJURY LAW FIRM: 1. How do you receive a settlement check from an insurance company; 2. How do you account for when you pay for an expense that will be reimbursed from the Trust Account; 3. How do you pay medical providers from the Trust Account after you receive the settlement check and deposit it into the Trust Account?
@LeanLaw
3 жыл бұрын
Hello there. This isn't the best medium to answer your questions as they are complex. LeanLaw can help facilitate all of the work associated with a settlement. LeanLaw will allow for the receipt of the initial settlement payment, ensuring the correct accounting is set up in QBO. Handle the firm's reimbursements for expenses and legal fees, the payment of any liens, and finally, the disbursement of the client funds. Here's a link that explains this in greater detail. support.leanlaw.co/en/articles/1311765-how-to-bill-for-contingent-fee-matters We hope this helps.
@richardregan7423
4 жыл бұрын
My quick books on line does not have the same options available when I use the invoice, then payment option. I don't have the ability to transfer from within the client.
@LeanLaw
4 жыл бұрын
Hello Richard, you may be confusing LeanLaw features that facilitate the trust transactions within QuickBooks Online. There are aspects of this video that show how to handle these trust activities using LeanLaw in tandem with QuickBooks Online. Let us know if you have additional questions. Thanks for your feedback.
@LeanLaw
4 жыл бұрын
Hello Richard, this isn't the right medium to answer this specific question. Feel free to use our chat tool from our Website (www.leanlaw.co) and our team can better answer your questions.
@mariamt.9896
3 жыл бұрын
For the Step 4: Payment option, do we need to select the Check option all the time? When applying the payment to the invoice, can I select something like LawPay or credit card payment method, or do I need to select the check?
@LeanLaw
3 жыл бұрын
The check is just a placeholder. It's best to articulate whatever instrument you received the money. If it was LawPay, then, yes, LawPay is what you should identify.
@syedmehdirizvi6154
4 жыл бұрын
I tried this method. However, using this method would never reconcile the customer's balances to 0 in the transaction list per customer report. It will always suggest, we have double the money.
@FitnessBoyd
4 жыл бұрын
How are you documenting receiving the money? A sales receipt will have a different result from an invoice and a customer payment. When a client pays, I create a bank deposit into my iolta bank account and assign the customer's name and liability subaccount and my transaction report balances properly.
@LeanLaw
2 жыл бұрын
if you set up Trust accounting with QBO AND LeanLaw, we could help you overcome this issue.
@officemanager6713
2 жыл бұрын
How can I apply this to my firm if the operating accounts and the client trust accounts are on separate QB files?
@LeanLaw
2 жыл бұрын
They cannot be in separate QBO files. Doesn't work that way.
@vickieheather9682
Жыл бұрын
Too blurry to follow
@Joeblow95776
2 жыл бұрын
Why are you using a trust account for retainer? A retainer received in advance of legal service is not a trust account transaction. It should be debited to the operating bank account and credited to unearned retainer fee. At the end of the month, whatever legal service was performed should credited to legal service revenue and debited to the unearned retainer fee. A trust account should be used only for funds received on the behalf of a client not normal operating income for the law firm.
@LeanLaw
2 жыл бұрын
Hello David, our research with both the ABA and the State Bar associations aren't in alignment with your comments. When law firms receive retainers, they must be deposited into the trust bank account as to not co-mingle with operating funds. Only when the services are earned, and ideally an invoice is presented, would you then pay the invoice and move the funds into the operating account. There are some States where you can treat retainers as earned income, but it isn't the norm, both in bar association guidance or law firm practice.
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