Q: How do I undo a trust payment? A client was invoiced twice by accident and both invoices were paid from trust. What would be the best way for me to reverse a payment from trust as well as the duplicate invoice?
A: To undo a trust payment, log in to QuickBooks Online and delete the payment. This will require deleting the transaction from both the Operating and Liability account.
To undo a Trust Payment, transactions from two accounts must be deleted, the Operating and Liability account transactions. Deleting the transaction from the Operating account will communicate to LeanLaw that the invoice is no longer paid. Deleting the transaction in the Liability account will make sure the clients trust balance remains accurate.
Delete Transactions from Operating Account and Liability Account
Note: these steps will have to be performed for both the Operating and Liability Account.
1. Log in to QuickBooks Online
Access the firm's account on QuickBooks Online to undo the trust payment.
2. Go to Chart of Accounts:
Once you are in QuickBooks Online, go to Settings ⚙, then select Chart of Accounts:
3. View Register of the Account
Go to the Account and click View Register. If you are unsure of the Operating (Checking) account click here! The Liability (Trust) account is often the Client/Matter name depending on accounting type.
4. Select the Transaction
Select the trust payment to be deleted:
5. Click Delete
Click the Delete button to undo the trust payment:
6. Confirm Deletion, select OK
Reverse the Payment OR Create Two Transactions
If the funds were already moved between the bank accounts you can reverse the payment. OR, if you'd prefer not to, you can create these two transactions:
Debit the Operating Account and Credit the Liability Account
Within the Journal Entry make sure to debit the Operating account, and credit the liability account that the funds were taken from:
Once these steps have been completed, send the invoice back to Draft from the QuickBooks Tab in LeanLaw if any edits are required.
Note: Refresh the LeanLaw web page to see the changes reflected for the payment.