Trust Accounting using QuickBooks

Recently I have noticed alot of information on the web talking about trust accounting using QuickBooks. I also notice that people are suggesting making subaccounts under the bank account for each client. This is a method I do not recommend doing. It limits you on having to make one transaction for each client. If you only have a few clients and a few clients in your trust account this may work for you but it will become very cumbersome when your practice starts to grow.

Key things to remember when setting up your trust account.

You need to be able to provide the reports on a monthly basis to show activity for each client, sometimes called a client ledger.

You need to be able to have a report that shows all the activity in the trust account and clearly identified for each client.

You need to reconcile your trust account monthly with your bank statement.

If you print a Balance sheet report in QuickBooks and the Trust account does not equal the Trust Liability you setup then something is wrong. All money going into and out of trust should be coded to Trust Liability. I recommend using subaccounts under the trust liability but you can just use the customer name.

You want to make your system easy enough that at any given time you can identify who has what in trust. This is a very important part of your business.

You never want to be in a position that you bounce a check in the trust account. If you mess this up it can cause the bar association to step in and look at what you are doing.

If you need help or would like me to review your current Trust Accounting procedures I would be happy to help. You may call me at 904-284-4480 or email me at Lynette@attorneystechnology.com

Converting Time entries from Time Slips or Tabs to QuickBooks

Are you currently using another program to track and bill your time?  Would you like that time to be brought into QuickBooks so you can have the history and start using QuickBooks to manage your time and billing?   If so I can help.  If your current program has the ability to print the time records to a csv or text file, this can be transferred in.    If you would like more information about this service please contact me at (904) 284 -4480.

Law Firm Sample Statement from QuickBooks

Attorneys can use QuickBooks to track time and bill clients.   This week alone I have had four people call and ask me what program should they get to work with QuickBooks so they can do billing.   I told all of them they don't need another program you can do it in QuickBooks.  

QuickBooks has a built in feature to track time.   You can customize it so you can track time by employee, types of work or by rate.   The trick is setting it up correctly.  

One complaint that I hear is that attorneys don't like the way QuickBooks Invoices or Statements look.  I  have created a sample statement from QuickBooks that only took a few minutes to create that I think looks professional for use in a Law firm. 

If you would like to learn more about how you can use QuickBooks in your law practice you are welcome to contact me.   http://www.attorneystechnology.com/

Thank you,
Lynette Benton

What is Undeposited Funds used for in QuickBooks

One of the most common question I get is “What is undeposited Funds?” When you receive a payment from a client it goes into an account called undeposited funds. Think of this as your bank bag. You may receive payments from clients throughout the week. You stick them in your bank bag.

You do the same thing in QuickBooks. When you are ready to go to the bank you click on Record Deposits from the Home Page. A window will pop up for you to select the payments you are depositing into the bank.

Now you select the bank account you are depositing the money into.

Undeposited Funds is just a holding account to place all the checks or cash you have received so you can group them together to make a deposit into your bank account.

Hope this helps.

Attorneys Can Use QuickBooks in Law Practice

I have heard many times that lawyers have been told and think that they can not use QuickBooks in their office to handle their bookkeeping needs. I disagree with this. QuickBooks is an inexpensive accounting software package that is designed to be easy to use by non-accountants. Even though attorneys have complex accounting needs, I have found through years of experience, that QuickBooks can accomplish the tasks you need to run your practice.

QuickBooks has the ability to do the following for attorneys:

Track time to bill clients
Track costs to bill clients
Bill clients for time and cost
Track income and expenses
Maintain a trust account

It is easy to accomplish if you have QuickBooks setup right to begin with. The biggest problem I have seen is neglecting the accounting aspect of your practice. Lets face it. You could be using any piece of software to handle your time and expenses but if you don't have an overall knowledge of how profitable your business is, you are just guessing.

Being able at any time to see how your practice is doing gives you a great piece of mind and a chance to fix things before it is to late. Most of the high price accounting packages for law firms are so complicated that you have to hire people that already know how to use them and then you are depending on them to tell you how it is going. With QuickBooks, you, the attorney, can easily learn how to get the information you want when you want it and you are not held hostage by a bookkeeper that may be the only one who knows how to run your software.

How long does it take to get setup and running? This is my most asked question. Here is a breakdown on the average time investment I think you will need to get up and running.

• 15 - 30 minutes phone call with you -Let me setup the file - I do this after I talk to you to find out a little about your practice and billing needs.

• 1 hour gathering information - This really depends on if you are starting out with a new practice or converting from another program. Things I would need to get your file setup would be client begin balances, client names and address information (I can show you how to add but if you have an existing program I can import this information for you) Trust account information, and billing rates.

• 2 - 1 hour online consulting appointments - Using remote connection software, I will put the file on your computer and show you the basic functions of QuickBooks like how to setup clients and matters, how to enter your time, and how to bill for it, how to write checks for client costs and regular operating expenses and how to receive payments from clients.

• 1 hour online consulting for Trust Accounting. I will teach you how to handle your trust transactions and get the reports you need to be in compliance with your state bar association rules on trust accounts.

• 1 hour online consulting - This is usually after the first month. I show you how to reconcile and how to make sure your information is correct.

The total investment in time is usually 4 - 6 hours and you will know how to use your accounting software to get the information that you need to make sure that your practice is healthy, and in compliance. I have been teaching attorneys how to do this for over 15 years and it works. You are welcome to contact me if you have any questions.

Setting Up Payment Plans Using QuickBooks

Here is an easy way to setup a payment plan in QuickBooks using the Invoice method.

You may have situations in which you want to setup a payment plan for a client using QuickBooks. Let’s say you are going to bill a client $2000.00 to do a case. One way you might want to do this is to create an invoice that day for the amount they are paying to start. Then create the remaining invoice or invoices individually with the date that they are due to make a payment. Use the terms as Due upon receipt. This will also allow you to create an aging report in the future so you can forecast what is coming in that month.

My new book for Law Practice Accounting using QuickBooks is available at www.attorneystechnology.com I show how to do this and so much more.

QuickBooks for Mac

How did I live without it? I recently purchased a Mac for the sole purpose of writing my book for attorneys and property owners who use QuickBooks on their Mac. I was surprised to see that it had a different look and feel than the PC version of QuickBooks. I was having so much fun with my Mac that I got rid of Verizon and purchased the IPhone.

Some of the differences that I noticed right off was how much faster QuickBooks runs on the Mac. The help files load fast and reports load faster. I love the fact that I can link my contacts to my address book and my IPhone!

I recommend attorneys use statement charges and not invoices. It is so hard or impossible to get notes out of the invoice for any reporting purposes. When using statement charges I entered a note with 250 characters and they all exported to excel. This is great! When I used the time sheet to enter information I noticed it will only let me put in 99 characters.

QuickBooks for Mac does not currently have a multi-user version. You can save your QuickBooks data file on your network, and different individuals in your organization can access the file, but not at the same time. Also, Windows and Mac versions of QuickBooks cannot work together on a multi-user license.

Well the book should be back from review this week. If you would like to be one of the first to get the book at a special price in August, please feel free to email me at lynette@attorneystechnology.com