Tracking a deposit of funds to trust in LeanLaw takes care of all the small, easy to forget steps for you! With the click of a button your deposit is automatically tracked in your Trust and Liability accounts, without needing to open QuickBooks Online. By showing you the billed totals for each attorney, collection detail, and any revenue that has not been allocated to a user, it can help you answer questions like:
Increase the balance of your IOLTA/Trust account
Increase the balance of the specific Client/Matter liability account
Makes the funds available to use as payment for invoices created in LeanLaw
Note: The depositing of funds within LeanLaw only accounts for the deposit of a physical check/transaction, meaning that you'll still need to make the bank deposit.
Preparing the Client/Matter and setting up trust accounting
Before a trust deposit can be recorded you'll need to set up trust accounting within your account. This allows LeanLaw to properly sync with QuickBooks Online, automating the 12-step trust accounting process for you! The article to complete that is linked here.
Once a Client and Matter have been setup to handle Trust, you'll want to start tracking deposits for said Client. If you have not completed this already, follow this link.
Steps to Deposit Funds in Trust
[Step 1]: Navigate to the Trust Account Page
Where to go to make the deposit (can also do it from within the Client's trust account or from the dropdown
To start, navigate to your Billing page, and open the Trust Account tab. Below you'll find the Deposit Funds button, which opens a second window.
[Step 2]: Open the Deposit
Welcome to the "Funds Held in Trust" page! This is the hub for all of your trust accounting needs, and is one of the places you can record a deposit.
Clicking the "Deposit Funds" button on the left will open the deposit modal, and allow you to start the deposit.
If the Client already has a trust account set up in LeanLaw, they'll be accessible in the main Trust Account page. By clicking on a Client, their specific account information can be accessed. This displays previous transactions, includes buttons for deposits, payments, and reports.
ProTip: Create the deposit from Quick Create
[Step 3]: Filling out the deposit
To create a Deposit, you'll need to select a Client, Matter, and an Amount. The Source and Memo fields are included for your bookkeeping, and will be included in the QuickBooks transaction.
The From field is required. Trust accounting regulations require you to explicitly record the source of funds with all deposits. This can be a check number, credit card, or cash deposit.
Both From and Use are added to the Memo field, which populates the Memo field on the transactions in QBO.
Click "Record Deposit", then your deposit will be saved and sent to QuickBooks Online.
What Transactions LeanLaw creates in QBO
Recording trust deposits in LeanLaw saves you time by automating the accounting for those deposits. Once a deposit is recorded in LeanLaw, a couple of transactions are created in QuickBooks.
First, a new deposit is recorded in your IOLTA/Trust bank account:
Second, an increase is recorded in the Client's Liability Account:
How to record a trust deposit without LeanLaw
While recording trust deposits in LeanLaw is much simpler, some firms may need to occasionally record deposits directly to QuickBooks Online. We've broken down the process for trust accounting WITH and WITHOUT LeanLaw, show in the videos below:
Trust funds received and held in on behalf of the Client, which accrues interest that the state uses for charitable purposes.
Total value of the "Funds Held in Trust" (unless otherwise named) liability account, which is the ledger for each Client/Matter trust balance. This is synced in from QuickBooks Online.
Balance of the trust bank account according to QuickBooks Online.
Total Client Balances
The sum of each individual Client and Matter liability account. If this value is different than the "Liability Balance" then there are likely funds sitting at the to level of the liability account.
Account Balance (Receivables)
The sum of all open invoices, which can be paid using the available funds in trust.
A list of trust transactions for the specific Client or Matter. This is synced into LeanLaw from the liability account in QuickBooks Online.
This links to a QuickBooks Online report that shows the trust transactions for this Client or Matter. It is the most detailed view, but requires that you are logged into your firm's QuickBooks Online account.
Trust Account Balance
The available balance of funds in the Client or Matter's liability account.
Gravity Legal was born out of Seattle-based Gravity Payments by a team passionate about helping law firm succeed. LeanLaw has partnered with them to build the "Trust Request" feature.
Evergreen retainers are business arrangements with clients that requires a minimum balance in the client trust account. The minimum amount is reflected on invoices (in the trust memo), and in trust reports.