QB Issue Resolution:
First of all, I do not recommend using QuickBooks Online for trust accounting, due to the reporting limitations of that program.
Trust accounting in QuickBooks is a little tricky and needs to be tracked using specific procedures in order to get good reporting for the Funds Held in Trust (escrow) detail by client.
Here is my general procedure for tracking trust accounts in QuickBooks –
Deposit the retainer/settlement check into the Trust/Escrow bank account, using a Funds Held in Trust (Escrow) liability account with the client name in the name field. I do this directly in the Make Deposit form, but you can enter a sales receipt, using an item which points to the liability account.
Then, write checks for any disbursements of those funds, using the Funds Held in Trust (Escrow) account on the expense tab of that check – with the client name in the name field on that line. Or, if you want the detail of how those disbursements are made, create separate items, all pointing to that account, to indicate what that ‘paid out’ is for – Insurance, taxes, fees, etc.
Then, if applicable, invoice the client. . .for the professional fees (time or flat fee billings) and any advanced costs (previously paid out of the operating account) as separate items. . .
Then, cut a check from the Trust/Escrow bank account to the law firm, using the Funds Held in Trust (Escrow) account on the expense tab of that check – with the client name in the name field on that line.
Then, ‘Receive payment’, using the client name, and attach that payment to the open invoice.
Then, deposit the funds into the operating checking account, either directly from the payment, or via Undeposited Funds.
I have created a group of memorized reports to show the client trust activity and balances to use when reconciling/reporting client balances and/or the bank statement. These provide the necessary 3-way reconciliation (as of any given date):
Trust Bank = Funds Held in Trust (liability) = Total of individual Client Fund Balances, with ledger detail
These are two completely separate areas of your business and the transactions need to be recorded as such. . .so much so that some law firms track their trust accounting in a separate QuickBooks file (although I don’t see the need for that myself).
Note: There is no way to automatically show the trust balance on an invoice. You can, however, create a custom field, or enter a line in the description field, to notate the remaining trust fund balance. The amount will have to be manually entered on each invoice. If you put the amount remaining in the memo field, it won’t print on the invoice, but will show up on statements and in the customer center.
Review the above procedure(s) step by step and confirm that this meets your state’s regulations and reporting requirements.
If you still need help, I suggest that you contact someone directly for assistance.
You can search www.findaproadvisor.com if you want someone local.
Also – many of us work remotely and can be contacted via the info on our websites or profiles.
I hope this helps,
Resolution for Issue 'How do I get funds from my Trust Account- Liabilities account to balance out with an Trust Account- Asset?' available: Yes (Solved).
Source: Intuit Community forum.
How do I get funds from my Trust Account- Liabilities account to balance out with an Trust Account- Asset?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.Support for Quickbooks/QBO
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