How Can I Resolve Trust Balance Discrepancies in LeanLaw Caused by Rejected Deposits or Invoice Errors?
Maintaining accurate trust balances in LeanLaw is essential for managing client funds effectively. However, discrepancies can arise due to rejected bank deposits or errors in invoicing. This article provides a step-by-step guide to identify and resolve such issues to ensure proper synchronization between LeanLaw and your accounting system, such as QuickBooks.
Common Causes of Trust Balance Discrepancies
Trust balance discrepancies in LeanLaw often result from two main scenarios:
Rejected Bank Deposits: When a deposit into the trust account is rejected by the bank, LeanLaw does not automatically adjust the balance if the transaction was processed through a third-party system like Confido Legal. - QuickBooks may show both the deposited and returned transaction, leading to an incorrect balance in LeanLaw.
Invoice Deletion Errors: If an invoice paid from trust was deleted due to an error, subsequent invoices may have incorrect starting trust balances. This often occurs if the sequence of invoices and payments does not align correctly.
Steps to Resolve Rejected Bank Deposit Discrepancies
Follow these steps to correct trust balance errors caused by a rejected deposit:
Check the Liability Account in QuickBooks: Verify the related journal entries in your accounting system. Look for entries corresponding to both the deposited amount and the returned amount.
Delete the Returned Transaction: In QuickBooks, remove the journal entry recording the returned deposit. This action will reflect the accurate balance, as LeanLaw automatically syncs trust balances with QuickBooks.
Steps to Resolve Invoice Deletion Errors
Resolving trust balance discrepancies caused by invoice deletion requires resetting the sequence to ensure accurate payment application:
Undo/Delete Related Payments and Trust Entries: Start by removing any trust payments linked to the affected invoices. This clears the ledger entries for recalibration.
Void/Undo the Affected Invoices: This allows you to recreate the invoices from scratch without the errors.
Recreate Invoices in Chronological Order: - Begin with the first invoice that was deleted, ensuring the starting trust balance is correct. - Apply the appropriate trust payment to the recreated invoice. - Proceed to subsequent invoices, applying trust payments in order.
Update QuickBooks: Delete the payment for the initial invoice on the trust liability side in QuickBooks. This ensures the funds are still associated with the correct trust balance.
Key Points to Remember
Always verify changes in QuickBooks after making adjustments, as LeanLaw reflects trust balances from QuickBooks.
Maintain a clear sequence of invoices and payments to avoid future discrepancies.
Consult with your accounting professional for complex adjustments that require advanced knowledge of journal entries.
By following these steps, you can ensure that your trust balances in LeanLaw remain accurate and consistent, minimizing discrepancies and maintaining clarity in your financial records.