Linda Artesani walks bookkeeper Rosanna Leib through finding a $12,500 error in a law-firm trust account. Deposits were posted to the wrong account. They locate the mis-posted transactions in QuickBooks, move them to the correct trust bank account, and verify the balances reconcile.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping and co-founder of QuickBooks Community Live, this group. And this is our mentoring group and I am mentoring Rosanna and she's going to introduce herself and then we're going to jump right into fixing some messy— a messy file that I created in QuickBooks. So So I'm going to pass it off to you and do a little quick intro.
Hi, my name is Rosanna Leib. My company is Next Door Bookkeeping. Yes. And I'm here to have Linda mentoring me on the trust account today. So I need help.
She's going to help. She's going to actually fix it. We're going to dive in and try to figure out what's wrong. So let me share my screen. I know I actually had fun making a mess. I'm like, what do people usually do when I'm trying to help them? Over. What do they usually do that makes a mess out of a file? And so I did. So I'm going to give you remote control. So you should see a little box pop up. So here's the, here's the bank account. Here's the homepage of the law firm account. And then I'm gonna take you quickly over to LeanLaw. And typically, when I work with a customer that has their hands in the file, and I do some things and they do some things, I just check on the trust account. So I'll go over here to the trust account. And just see how things are. And so here's the healthy report card of the trust account. And as you can see, the balances of the trust account equal each other. But, and I've seen it where some, all 3 of these are different numbers, but the bank balance doesn't equal. So what do you think might be an issue here with what's wrong with it?
Okay, either there is Let's see, a double entry. Let me see.
So that—
oh, so maybe instead it was put in the trust account, it was actually put in the operating account.
You rock! Let's go check. Very good. That's awesome. Because you're right, because if the bank balance is lower than the liability, right? So all the trust accounts have their little balances and they equal to this. Obviously, this is the total of all of them. But the bank account doesn't have enough money. So logically, the money's somewhere, we just have to figure out where it is. And that's a logical place to think it is. So let's go in here. Where would you go first?
I would go to the accounting, accounting to the chart of accounts. I mean, I think, and then I would go to the IOTA account, to the trust account.
The register.
Mm-hmm.
Which has got this $26,000 balance. So it clearly doesn't have all the money that belongs in the trust, right?
So I have to see what the difference is actually of the— yeah.
So we got $38,687.50 and the bank says we have $26,187.50. So we're off by $12,500.
Oh, wow.
Yeah.
So let's see who the matter is.
Yep.
Let's go back to quick— yes, the register. So I would go now, see, to the— actually to the—
This thing? The search button?
The trust account. Wait, let me think.
Would you go to the balance sheet?
The banking—
Yeah, this doesn't have any bank accounts hooked up, so we have to stay here. But if you want to— do you want to go to the operating?
Yeah, I mean, that's one.
We can do it right from here. Yeah, if I had banking, you would normally go to banking. But so we know some of the funds that are deposited are in the wrong bank account, right?
Right.
So let's go next. Let's get into September so you can see because it's got— here we go. There's the line. So we know that there's— so there's $7,000.
Uh-huh. So $7,000.
But it's an odd amount.
Yeah. $17,000. That's all odd. Oh, there's a $5,000.
This is all in the operating.
Okay. So we need to see, like, I mean, this is one, like the one Yeah, the $5,000.
Let's look at it because that— see, it says it looks like it's a state thing. So let's peek at it.
Mm-hmm.
And see if it's a payment source check. So when you see that, you now know that this is most likely a trust deposit, right?
Yes, that's because it's got this source.
So we can go in and look under Jonathan Lewis over here, right, and go into his account. Which he— is he on the page?
No.
So we can go to Jonathan Lewis and take a peek and see if he's got a $5,000 deposit that should be in trust. And it's— I mean, should be in the trust bank account. This takes a little bit of time, but for some reason— there we go. So there's $5,000. And it's a trust transaction. And it's in the wrong bank account, right?
Yeah.
Good detective work. So let's go back here. Let's put this one in the operating— I mean, in the trust account. Hit Save and Close. So now that's $5,000 of it. So now we're down to $7,500 we have to find. So let's see if we can find the $7,500. Okay, so it's not popping up right away. So where else could it be if it's not here?
Well, I saw it in the bank deposit.
So you think it's up here? If we went into bank deposit, it's just maybe sitting not deposited. Oh, you're a rock star. Look at that. So it got deposited. It's deposited today. So if I put that in the right bank account, which is the trust. Now let's go back to LeanLaw. And you always have to give LeanLaw a little poke. And then go to the trust account without any names. And then you'll see, look at that. Yep, you fixed it all. You graduated. No more mentoring for you.
Oh, I'm so sad.
That was amazing. I have to tell you, you can tell you know your stuff and you've worked in lien law. So that was awesome. Thank you so much. So we're going to end this week's little, little lesson here. There's other ways I can damage a file and have her figure it out. So until next week, thank you so much, Rosanna.
