QBCL Mentorship Week 6

So we're back for week 6 of the mentoring, and I'm Linda Artesani, Artesani Bookkeeping, and also the co-founder of QB Community Live with my partner Matthew Fulton. And I have the lovely Rosanna here, and she has been mentored by me for a few weeks, and we've been having— we have good chat sessions. But now we're going to do a quick recording because we already went through her file and looked at something in her file. So I've recreated it in the dummy file, and now we're going to take it away. So Rosanna, tell us about yourself.

Hi, I'm Rosanna Lai. My company is Next Door Bookkeeping. And yes, I'm here with Linda. They're helping me to mentor through trust accounts mainly. And so I like to know a better way how to handle from LeanLaw to QuickBooks Online, the trust accounting billing. And so how to use the workflow on that.

And I can honestly tell you that this is one of the parts that I had trouble wrapping my brain around. So I think that I'm not alone. And a lot of times you have to think about you're receiving the— you're receiving the retainer. So it's the prepayment, and you're putting it in the trust account. And then the attorneys do the work. And then they create an invoice, which we've already created in QuickBooks. And then we're going to receive the payment. The one thing I can tell you is every transaction happens in LeanLaw, all the reporting due to clients, For the most part happens in LeanLaw. So I'm going to share my screen, take us to LeanLaw because that's where we're going, right? So let's go to LeanLaw and I'm going to talk you through it. So, um, so we're in LeanLaw. I'm in my fake account and I'm going to take you over to— let's see. So we're going to look at a trust. So trust doesn't show here. So I'm going to click billing so I can make that button pop up and we're going to do it on— I'm trying to think who it was. Actually, if we trust accounts, let's pull them all up. And I think it's Jonathan Lewis is the client. So you can see Jonathan Lewis real quick here. You can see all my trust balances. And Jonathan Lewis has got $3,302.50 in his account, but he also has $1,257 in accounts receivable. So let's record a trust deposit. So I'm going to pretend Jonathan said that we asked for him, we need another deposit because we've done some work and we're starting to bill and I want another deposit for trust. So I'm going to collect a retainer. So how would you do that in LeanLaw?

Yeah, I go to the plus sign and I go to the deposit to trust. Yep.

And it's Jonathan— not Jonathan Fishman, Jonathan Lewis. And I'm going to put in $5,000. And then I'm going to set a date and I'll just put in for the source check 1234. And then I'm just going to hit record deposit. So depending on your settings, that money either went into undeposited funds, or if you have— if you do these individually, depending on the attorney you're working with, some attorneys collect the payments all week and then they go to the bank at the end of the week. So then you need to do it in undeposited funds. But if it's somebody that just records payments, has that— does it with their, you know, their phone, they take their phone and take a picture and put it in individually, then have it go directly. It saves us that. So now that has been recorded in LeanLaw, and I will show you that if we went just to Jonathan Lewis's account. I love these buttons. So as you can see here, I can load the transactions here, and this is going to show all the transactions that are in this particular account. But I can also click a button and it will take me— it takes a couple of seconds to load. There's also this button that will take me to QuickBooks. So here is his history, right? So here's his initial deposit. Here's where we got a payment on an invoice, another payment on invoice. And then this is the deposit we just created. So this is why he now has $8,302, which before he only had $3,302. So here's his invoice that he has open. So if I wanted to see how this looks in QuickBooks, I can click this button and it's going to bring me right into QuickBooks, right into his account in the chart of accounts, which like, boom, there it is. And now you can see the flow, right?

Same balance.

You can see the whole history. It started with he gave us $5,000 retainer, the attorneys are in this and they earn this, and then this is the balance, and then we asked for $5,000 more. So we'll go back to LeanLaw. Now we're going to record the payment. So we're paying this invoice. So logically, right, you're going to click this button to record it. So we're recording this payment and you can put as many details as you want in here and record the payment here. So now those 2 payments are now in QuickBooks. So if we go back to QuickBooks, of course, we all know with QuickBooks, we can click right here and we're going to see the history of what we just, just did. But let's go to the plus sign, bank deposit, and see if— I think I have this one, this account set up to go right to— yeah, here's the 2 payments. So we now know this is a journal entry. This is showing the payment of the retainer, right? Here's the $5,000 we received. So we have to make sure that goes in the right account, and the general business account is not the right account to put a retainer in. So we're going to go to the trust account, bank account, and then click this and deposit the $5,000 in there. Now I didn't mean to hit Save and Close, so I'm going to go back. Now we've received— here's the money we received. We invoiced for— we billed for the time, the attorney's time. We received the payment for the time. Now this will go in the operating account, but again, you got to watch it because see how QuickBooks has a little memory thing? It remembers the last thing we did. I don't want this to go in the trust account because this is now revenue earned. So what we're doing is we're taking the money out of the deposited retainer. And shifting it to the operating account as revenue for the attorney. So I'm going to change this to operating. And find the operating account, which I never seem to be able to pull it. There we go. And then I'll click here. And then I'm going to deposit in that account. So like I said, and we can go right into the bank accounts and see, but like I said, when you go to— when you go into QuickBooks and LeanLaw, if you have the settings preset that any trust transaction goes directly into the IOLTA, then you can skip the step which I just showed you. I have it set for undeposited funds, so that's the reason why we had to do that step of the bank deposit. And then if we go into the account register, um, if I go into general business, we'll go into the register. You're going to see that the money that we received as revenue is in here, is recognized in here right now.

This is—

I always forget about this, that it's dated. Like, oh, we're almost catching up to the date. So this is a big Fake file. And so you can see, here's the money we just put in for that account. And then if we switch to the IOLTA, we're going to see in the IOLTA account, the trust account, that same money, which this may be further— that same $5,000. Here's the $5,000 that got deposited.

It's that easy.

So it seems so easy. But that's why you always do everything in lien law. All that stuff, all those transactions happen in lien law. You shouldn't be receiving a payment in QuickBooks. Because if you do, unless it's just straight up AR and doesn't have anything to do with the trust account at all, and it's just like, like an immigration attorney that doesn't deal with it, you can do it. But I still do everything in LeanLaw. If they're billing out of LeanLaw, record the payment in LeanLaw. Don't, don't do it outside of LeanLaw. Obviously, if you just don't have LeanLaw, you got to do it all in QuickBooks, and it can be done.

Mm-hmm.

And that's for another video. But when you're using LeanLaw, it's just that easy step. So now I know my, my account balance is correct for the IOLTA for him, his trust account balance is accurate. His accounts receivable has been cleared up. And it's ready for the next time he needs a bill for the attorneys to take the money and put it in their own, their own account.

Hmm.

Okay. So quick video. Yeah, quick video. But I think it's something that can probably go over and over and over again, because it seems confusing. It's so easy to be in lien law and then say, oh, I received the payment and then go into QuickBooks and receive the payment, but then it messes it up. You really want to do all that functionality through lien law.

Okay, great. Well, thank you.

And if you didn't do it through LeanLaw and you've been using LeanLaw and you're like, why is this not hitting the right, right accounts? You can delete the payment in QuickBooks on an invoice and then roll back the invoice in LeanLaw back to like draft or whatever and then redo it if you have to. If it's not seeing it, that's how I do it. I don't delete an invoice. If you're fixing a messy file, just go roll it back and then you can bring it all back into LeanLaw, all the billing will be all back ready to rebill and then put it back in and then record the payments in there and then you fix it. So.

Okay, great.

Simple week. We have one week left. That went by fast even though I had— next week I am traveling so I won't be here. So it'll be the week after and then I'll be traveling again to QuickBooks Connect Toronto.

Nice. Oh yeah, that's right. That's coming up.

Who wouldn't want to leave Florida to go to Toronto? Oh, I get to wear my winter coat and my boots. Yeah, actually, I'll be wearing it next week in Ohio too.

You get to see Marietta.

I don't think she goes to QuickBooks Toronto. I get to see all my Canadian friends. No, I don't think she goes there. No. So on that note, I hope everybody has a great week. We're almost through the week. So yeah, it's almost through November. It feels like it went by so fast. And we'll see you in 2 weeks.

Okay, sounds great. Thank you so much, Linda.

Bye.