To fully reverse a Trust Payment, transactions from both the Operating and Liability accounts need to be deleted in QuickBooks Online. Both steps are important for the following reasons:
Deleting the Operating Account Transaction removes the payment record from LeanLaw, signaling that the invoice is unpaid.
Deleting the Liability Account Transaction ensures that the client's trust balance remains accurate.
Follow the steps below to undo the Trust Payment.
Steps to Undo a Trust Payment in QuickBooks Online
Log in to QuickBooks Online
Access the firm's QuickBooks Online account to begin.
Navigate to the Chart of Accounts
In QuickBooks Online, go to Settings (⚙) and select Chart of Accounts.
Access the Account’s Transaction Register
Go to the specific account and select View Register.
Note: The Operating (Checking) account may vary. For help identifying it, click here. The Liability (Trust) account typically corresponds to the client or matter name.
Select the Transaction to Delete
Locate and select the trust payment transaction.
Delete the Transaction
Click Delete to remove the trust payment.
Confirm Deletion
Confirm by selecting OK.
Optional: Reverse Payment or Manually Adjust Accounts
If funds have already been moved between accounts, you may reverse the payment OR manually adjust the accounts by creating two transactions:
Debit the Operating Account
Credit the Liability Account (the original source account for the funds)
Use a Journal Entry to perform these adjustments.
After Completing These Steps
Confirm that QuickBooks Online is reflecting the correct balances for the accounts.
Refresh LeanLaw to update and reflect changes to the payment status.
You can send the invoice back to Draft from LeanLaw’s Manage Invoices tab if edits are needed.