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.

Entering Credit Card Charges in QuickBooks

Setting Up for Credit Card Transactions
If you have a credit card that you use only for the business then you will want to set it up as a credit card account.

1. Click on Chart of Accounts from the Home Page.
2. Click on New from the Account button.
3. Choose Credit Card as the Type of account.
4. In the Name field type in the name of the credit card.



You can enter the charges as you make them or wait until you get your statement and enter the charges at that time.

1. Click on Banking from the Main Menu.
2. Click on Enter Credit Card Charges.
3. Choose the credit card in the Credit Card field.
4. If you want to do it using the statement and put them all on one charge don’t fill out the Purchased From and use the statement date as the date.
5. Enter a description of the item purchased in the Memo column.
6. Be sure to remember to choose a class in the Class column if you are using classes in QuickBooks.


Paying a Credit Card

To pay a credit card you just write a check. Enter the name of the credit card company in the Pay to the order of field, enter the date and the amount you are paying. In the Account column choose the credit card account you setup.

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.

Recording Cash Transactions in QuickBooks

There are some occasions in which you purchase items with cash or on your personal account. You want to record them so you can write off the expense. These transactions can be entered into QuickBooks with a journal entry or you can setup a bank account called petty cash.

Journal entry method:
1. Click on Company from the Main Menu and click on Make General Journal Entry.

2. Choose the account the expense was for. In the Debit column type in the amount of the purchase. Enter a memo regarding the purchase. If you are using classes in QuickBooks don't forget to enter a class.

3. You will credit the Owners Draw or Draw account the total of your debits.

In the Chart of Accounts you will want to have an account for money you put in and take out of the company. This could be called Owners Draw or Draw. They type of account it would be is an equity account.

Petty Cash Method

Another way to handle cash transactions is to setup a petty cash bank account. For example, let’s say you have $100.00 in petty cash. When you need to buy something you take it out of petty cash and put in a receipt. First setup a bank account called Petty Cash.

1. Click on Chart of Accounts from the Home Page.
2. Click on Add new from the Account button.3. The type will be Bank Account.4. The name will be Petty Cash.

When you write a check from your regular checking account for petty cash you will choose the Petty Cash account as the account. This will put money into the petty cash register.

Now that you have a petty cash account you can enter the receipts you have that you paid for with cash or through your own account. The main difference is that you don’t have to put a check number.

Recording Returned or Bounced Check from a Client

Lately I have been getting questions on how to record a bounced check from a client in QuickBooks. The first thing you have to know is how did you record the check the first time.

If the returned check was one that was applied to Accounts Receivable do the following:
1. Open the check register that the money came out of.
2. Type the date of the returned check
3. No check number
4. Enter the amount of the returned check
5. Click the Split button
6.For the Account choose Accounts Receivable
7. Enter a memo "returned check" in the memo column
8. Choose the client in the Customer column that it was returned against.

By doing this you will put the money back into the clients accounts receivable.

If you just deposited the money to begin with and applied to something like legal fees do the following:
1. Open the check register that the money came out of.
2. Type the date of the returned check
3. No check number
4. Enter the amount of the returned check.
5. Click the split button.
6.For the Account choose Legal Fees or whatever account you used when you first deposited it.
7. Enter a memo returned check
8. Choose the client that it was returned against.

This will then reduce your income for the bounced check.

Hope this helps out. If you have any questions you are welcome to contact me at my office. (904) 284-4480.

www.attorneystechnology.com

Setting Up Users and Passwords in QuickBooks

QuickBooks allows you to setup Users & Passwords. This allows you to secure your data. In setting up users you can also assign rights to the user. For example, you may have someone who helps you with your billing and receiving payments. You would set them up to only be able to see the accounts receivable information.
To setup users and passwords:1. Click on Company from the Main Menu.
2. Click on Setup Users and Passwords.
3. Click on Set up Users.

The User List box will appear. This lists all of the users that are currently set up. The Admin account is set up by default. You may want to set a password for the Admin account, click on Edit User. Enter the new password and enter it again in the confirm password box. Select a challenge questions, and input the answer. When you are finished, click on Next. Click on Finish to complete the process.
Now we can add Users to your QuickBooks file.1. Click on Add User. Type in the name they will use to log in with and a password. Click Next.

2. Choose Selected Areas of QuickBooks.

3. Since Julie is going to be helping with billing and receiving payments we will want to give her full access on the Sales and Accounts Receivable window, choose Full Access and click Next.

4. Go through the additional windows and choose the options that fit your user.

5. Once you are done you will see a summary of the choices you picked. You can now review them and then click Finish. It is a good idea to log off and then log back on as them so you can test it out and make sure you have selected the right choices.


If you need help with learning more about QuickBooks I offer online consulting services. To find out more visit our Quickbooks Consulting service page at attorneystechnology.com.