In LeanLaw, our true integration with QuickBooks means you can make legal trust deposits and pay invoices from trust in a few simple steps. Easily deposit client funds and pay invoices with trust funds.
Start In QuickBooks Online
1. Identify or Create Your Operating Bank Account
To begin, you will start in QuickBooks and locate your Main Operation Bank Account. This is needed so that transactions that affect both accounts (such as invoice payments from the trust account) will be properly recorded in QuickBooks Online.
If you've already set up your Operating Account, you'll be able to see it in your Chart of Accounts in QuickBooks. If you haven't created an Operating Account yet, you can click the green "New" button on the top right to set it up.
You can choose if you want to use the Undeposited Funds account in QuickBooks Online to “hold” your trust deposits until your actual bank deposit is made. You will want to make sure that your Operating account in QuickBooks Online is properly set up as a bank account and you will probably use checking account for the detail.
2. Identify or Create the Trust Account
The next step is to locate or create your Trust Account in QuickBooks Online. It is important to make sure that you have the account set up with proper details. The detail for your Trust Account should be Trust Account, not checking (even if it is a checking account). This is necessary for the mapping from LeanLaw to QuickBooks Online.
If your Trust Account is set up as a Checking account instead of a Trust Account, you can change it by clicking on the down arrow to the far right of the row and clicking "Edit."
3. Connect Your Trust Liability Account
You now need to connect your trust liability account. If you do not have one, LeanLaw will automatically set it up properly in QuickBooks Online for you and then connect to it. If you do have a main liability account already established, you should be able to identify it during setup.
As you can see in the QuickBooks Online account above, the account and detail types should be set specifically to Other Current Liabilities and Trust Accounts Liabilities respectively.
Go To LeanLaw
1. Navigate to the Trust Accounting Settings:
Click on the gear icon on the top right corner to access LeanLaw settings. The Trust Accounting setting is under the Firm Setup header. You may need to scroll down to locate it.
2. Setup Operating Account and Trust Payee Vendor
In the Trust Accounting setting, you'll notice that your firm's Operating Account has automatically populated. Any time a payment is made from trust, the amount will automatically assign the payment to the operating account listed here.
Next, create a Trust Payee Vendor by selecting your firm name from the drop down menu. This will set your firm as the payee when you record a payment from trust.
Note: Click here if you receive the following error: Failed to create trust payee called <firm name>. Make sure your firm's name isn't shared with another entity in QuickBooks
3. Edit Invoice Trust Notice
Now that the Operating Account and Trust Payee Vendor are set up, you can review and adjust the default message that will appear on invoice memos related to a client’s trust account. It will recap the trust balance, projected payment to be made on the invoice, and then the remaining balances.
Note: if you are using LeanLaw's invoice PDF and/or the account summary in LeanLaw's email settings, you should clear the text from the trust memo so it doesn't populate on your invoice. The account and retainer summaries LeanLaw generates in emails and on the LeanLaw invoice PDF are based on actual payments, not projected payments based on available funds and therefore are more accurate.
This message can be customized as needed. Read on here to find out more: How to Change the Retainer Information Memo.
How to fix the "failed to create trust payee..." error
The error, Failed to create trust payee called <firm name>. Make sure your firm's name isn't shared with another entity in QuickBooks, occurs when you already have a customer or an employee in QuickBooks with your firm's name. QuickBooks doesn't allow a vendor, customer, or employee to share the same name, so you'll need to change one of them. These steps will help you find and rename your existing client or customer in QuickBooks.
1. Locate the customer or employee in QuickBooks
In your QuickBooks account, locate the customer or employee that shares a name with your firm. You can use the search function, or find them directly in their tab.
Customers can be found in the Customers & leads tab of your QuickBooks.
Employees can be found in the Payroll tab of your QuickBooks.
2. Click edit
Once you open the customer or employee's that possesses your firm name, click Edit. This will allow you to change the customer or employee's display name.
3. Edit the Display Name
Edit the Display Name field of this customer or employee to something else. If you're concerned about this name showing up on any official documents later, you can also change the Name to print on checks field back to your firm name when you're done. Click Save when you're done.
4. Assign the trust payee in LeanLaw
Return to LeanLaw and assign a trust payee by following the steps provided above in the section, "How to assign a trust payee."
You now have a vendor created in QuickBooks with your firm's name, and that vendor is marked as the payee for trust payments going forward!
Once you are set up, read on here for more information on trust deposits, payments, and requests: