Learn LeanLaw Trust Account Function

Hi there, Linda Artesani, Artesani Bookkeeping. We've been diving into LeanLaw and really getting deep into different sections. I've been trying to keep these videos a bit shorter. So if you're looking for a specific feature, this kind of gives you a good overview of how it works. As you know, LeanLaw is a time and billing software for attorneys, and it works beautifully with QuickBooks, particularly QuickBooks Online Advanced, which is my favorite piece of the puzzle. QuickBooks Online Advanced is a powerful program. It's a powerful accounting platform. When you layer on LeanLaw and integrate the two, you've got this amazing workflow with technology and automation. And whenever we add automate— automating processes, we tend to be able to the error— errors down and try to keep the workflow easier. That's probably the reason why you're even watching this video or why you maybe signed up for a trial of LeanLaw. I've worked with multiple programs. We specialize in migrating people off of PC Law, off of Jura, some of the clunkier desktop programs, or even some of the programs that just aren't that great with accounting. Maybe you're a law firm that's sitting here wanting to grow And you want to move to the future and be future ready, but you're in a program that doesn't give you the data points you need. So when you use these 2 programs, you really have what you need to really get deep down in the numbers. Let me share my screen. I'm going to take you through a couple of the settings and why I choose specific settings with specific law firms. And then I'll take you just to show you how to receive a retainer in trust and how to apply a retainer to an invoice. Let me share my screen. So here we are in LeanLaw. I'm on the QuickBooks tab. We've already gone through the calendar, the time entries, the ready to bill, the draft, the approved, the billing tab. And I'm in the QuickBooks tab because this is where the invoices land when you've created the invoice to recognize the revenue or just to flat out bill your client for accounts receivable. And I'm going to skip over to the settings here. There's a couple of important points here. to note when you're working with law firms in lien law, because depending on the firm, they may have a specific workflow that they're used to. If they're a smaller, more boutique-y type of law firm, single or a solo plus one, they might just— I've seen them. They take— they have an app on their phone for their bank account, their IOLTA, and the checks come in to apply the retainer. And they just put the deposit in. So you can pick over here to use undeposited funds account or not. If it's a smaller firm, or if it's a firm that uses the one check or one transaction method, so they receive the retainer and they instantly put it in the bank individually, great option is to shut that part off and eliminate any errors by tracking where the money will go directly to iOLTA. And this only works if you have one iOLTA. If you have more than one, you want to have the Undeposited Funds box checked. And you can pick whatever account, but clearly you want Undeposited Funds if you're working with QuickBooks. It's also where you connect your operating account. So if I had this off, and I'll just demonstrate this for a moment, I'm gonna hit Save. If I go back to here and I just receive a deposit to trust, and I'm just going to pick a client, William Aldridge, and I'm going to have him pay me $5,000. Because I have this off, he's going through divorce. I would put in that he mailed me in a check for the retainer, or maybe he came in on the spot and paid the retainer. So I'm just going to do, you know, check 9191 and record the deposit. You can see here, this is the first deposit for this matter, and we will create the necessary account under the trust liability account. Really good feature to have happen. I don't have to now go to William Aldrich, never had a deposit yet. He didn't have an IOLTA, he didn't have his liability account created, so LIMA is going to create it. There's your automation. It's now created that account for him because I had it set to go directly to the IOLTA account. You can see here it's already He has a trust balance. Let's see how that worked in QuickBooks. I'm going to come over to QuickBooks. We'll just click this. We have, we have debates at my firm whether it's a spyglass or a search icon. You can see here, here's the deposit. So because I didn't have Undeposited Funds checked off, it went right into the bank. It came in here. Here's the transaction. And if you want to go to the More button, which is part of QuickBooks Transaction Journal, you can see the back end of any transaction in QuickBooks. So it's going to show you the journal entry, so to speak, of how this went in in the general ledger. So the deposit happened, it happened in IOLTA, and it happened on the trust liability side. So I can go here, it created the liability account for me. And if I come— let's go back here, just go back into lien law for a moment. If I want to pick Aldrich William, and I'm on the Trust tab, I can actually go to the trust report, I can go to the transaction report to see the Transactions, and now it's bringing me to their trust statement. So you can see that the only transaction here is this deposit. I can come back here to Trust Accounting again for William Aldrich, and I come over to the Trust Report. And this is going to take me to QuickBooks. Whenever you see the QB icon, it's taking me over to QuickBooks, and it's going to show me the Trust Report. This is his IOLTA account. So you can see here in the balance sheet, here's the— on the balance sheet, you would see the $2,300 is my client trust liabilities. I have one for William Aldrich. Now, LeanLaw created this. I didn't have to go in and do this. So in a split second, this happened. That's what's really cool. Now I'm going to come back to LeanLaw and I'm going to come back over to the settings and I'm going to imagine that I'm a bigger firm and that I'm going to need to use undeposited funds. So in this scenario, I'm going to hit save. In this scenario, you're going to imagine that you're a firm that once a month bills All your clients, you use— you have trust accounting, and you're going to be taking the trust balances and applying them, taking the retainer and applying it to the invoices. So let's go here. But you're going to do a multiple or a bulk amount of them, and then you're going to either make one transfer or you're going to print a bunch of checks and then deposit them in together. So we'll go back over to billing. I'll go back over to QuickBooks. I'm on the list of invoices that are in QuickBooks on the not paid. And I want to take off William Aldridge, and I'm just going to create a few payments. So I've got Vincent Price here. And we'll do this all at one time. I'm going to pick— I'm just going to pick a few. Matthew Fulton, maybe he's paying both of them, so he's got some money in trust to cover that. I'm going to pick— let's see, anybody else who has money in trust? Not really. Okay, so I don't have a lot of people that have money in trust here, so I'm just going to pick the few that are trust matters. So in this scenario, I'm just going to be paying my trust account ones. And you can do them individually by coming over here and you can see the view of the original draft. If I want to see the actual invoice, I can open the actual invoice in QuickBooks. I can record the payment or pay from trust. You can also come down here and just go pay, pay from trust. And then the trust payment is going to create 3 trust— it's going to create 3 trust payments for 3 invoices. in QuickBooks, withdrawing the money from trust and recording the invoice as payments. So I'm going to pay from trust. And this is a great way to do it in bulk. Now let's go back over to QuickBooks and see what happens. So now you can see that those invoices are gone. Those are all paid. And if I want to come over to QuickBooks, let's go here to see how that recorded. So here it is, it's going to record individual Payments, right? So here they are, individual payments paying those invoices. And you can see it's going through the category. The category is the liability account. So if I go to Matthew Fulton's account— I love making him disorderly conduct. So if I come over to the— to his particular ledger. So if I come here, you can see here, here's his account. If we view the register, you can see that he gave me $8,000 as a retainer, just like what we had done earlier. And then there were payments made on those 2 invoices so that his trust balance is now only $4,142. But I had the button checked for undeposited funds. So I'm going to come over here to put those payments into the bank. So they are right here. And I believe— not that one. Sorry, not those 2. So here's Matthew Fulton, Vincent Price. So here's the 2— I know this is a journal entry. So this journal entry is a retainer, so I'm not going to put that in here because these 2 checks are going to be deposited into my operating account. So I need to change this to operating. This is where some of the errors can start to come into play when you're doing this kind of a workflow, when you're using multiple checks. As you can see, if you do the single transaction method, you don't have to do this step, so there's less chance of error. But it depends on the firm. If you've got a firm with, you know, 1,500 to 2,000 matters and you're dealing with invoices in, in bulk, you probably want to use undeposited funds and just kind of do a smoother workflow. But it's really crucial that you take these steps and really be thoughtful about the steps that you provide here. I'm going to hit Save and Close. So now I'm creating that deposit and putting that in my bank account. So if I come back over here, to my operating account, you'll see that this deposit is now in my operating account. So I love the Manage Workflow feature inside of QuickBooks Online Advanced. And particularly when working with mid-market firms that tend to do the bigger groupings using undeposited funds, there's actually a template called Bank Deposits Reminder. I actually have been using that one. If you can see, I've got this one set up. And I can tell you that it, it sends me an email every day because I've got money sitting, I've got money sitting in bank deposit window that haven't cleared out. So it's important to get these bank deposits in. It's probably the number one reason that you'll see your IOLTA and your bank account, the liabilities, that 3-way not balanced. If you've got money hanging in there, the bank balance isn't going to show the right amount of money. That should match up with the other, other points inside the, inside the file. So you want the liability account and the total liabilities to match, and then you also want to have that trust bank account balance match. When that all matches, it's a wonderful thing, which is why that single method works really well. You avoid any of those errors, but obviously it doesn't really work with the bigger firms, so you've got the option to use undeposited funds. Maybe I'll do a video or 2 on how to figure out what the heck's wrong in a file because I'm sure that's something that a lot of us deal with when you work with attorneys and law firms. On that note, I hope you all have a wonderful week. And if you have any questions, comments, feel free to reach out. Join our Facebook group, QB Community Live. I'll have the post connected inside of my blog, which you can link to. And if you're an attorney and you're on a platform that's not working and you want to move to the cloud and automation, reach out. That's what we do. It's our specialty. So have a great day, and we'll see you on the next video. Bye now.