The video walks through the end‑to‑end revenue‑recognition workflow that links LeanLaw and QuickBooks Online (QBO). After setting up a client, matter, and trust account in LeanLaw and entering a retainer, the presenter shows how to create a draft invoice, have the attorney approve it, and then submit the approved invoice so it syncs to QBO. In QBO the invoice can be viewed and the corresponding trust payment is recorded in LeanLaw, moving the prepaid funds from the trust account to the operating account. The presenter demonstrates how to record the payment, handle the transfer (including state‑specific compliance considerations), correct a common mistake, and verify that balances line up in both systems, thereby completing revenue recognition.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping. So we've created the customer, we've created the client, we've created the matter, we've created the trust account, we've connected that to QuickBooks, we've entered the retainer, and now we're going into the billing cycle of how the billing happens in the matter and how we show the matter being billed out so that we can take the trust money out, apply it to the bill, and then move the funds into QuickBooks into the operating account so that now it's revenue that's been recognized. So let me share my screen. So here we are back in LeanLaw. Notice that that's where we stay and live with all this time tracking and invoicing and client stuff, right? Always in LeanLaw. So we're back in LeanLaw, and I'm going to come over to the tab for billing. So I'm just going to hit billing. And you can see that opens up a whole nother window. So here's my Suzanne Keir. It's already had the time entries have been made by the attorneys. Some of the soft costs have been put in. So now I want to create a draft invoice. So I'm just going to select Suzanne. And normally, typically, there'd be like a bunch of invoices, but I only have one here as an example. But most of the times when I work with the law firms, there's pages and pages of them. You can do it rather quickly. That's one of the beauties of LeanLaw. So I'm going to create a draft invoice. And this is specifically for the attorney to review. Since I happen to be the attorney, I'm going to jump in here and look at, look at the draft. As you can see, here's the workflow: ready to bill, draft, approved, open paid. So here's Suzanne. And I want to look at her draft and see what it looks like. So I know I had done this work, meeting with the client, begin, begin reviewing documents. That's correct. Had a few little soft costs in here, local travel and copies. So I'm just going to approve the invoice. So I'm approving it so that the bookkeeper or the accountant can now do the formal billing of it. So now that I go into approved, so usually the attorneys will email me or text me or call me and say, hey, I've approved all the drafts, go ahead and bill them out. So I'm going to go into the approved. I'm going to create this invoice. I'm only going to do Suzanne for now and hit Submit. And as you can see, you can do all of them at once. But once they've been approved, I can do that. I'm going to hit OK. And now it's sent into QuickBooks because you can see now that it's been— it's actually cranking now. See the little checkbox? That means it's in QuickBooks. So I can go to Open. And there's their invoice. If I want to see it, I can just click on it and there it is. And I can view it in QuickBooks. So I can click here, see how they're interconnected, you can kind of find them. I have to go digging into QuickBooks. I can find it real quick, really quickly. So here, here is the invoice to Suzanne Keir. And it's all the amounts here, $1,280. So I'm back in, back in LeanLaw. Now I'm going to recognize the revenue. So I've invoiced it, and I'm going to make the transactions, those paper transactions, in essence, but I take the money I already had, I've already been prepaid for this invoice. So now I'm going to take the money out of that trust account, apply it to this invoice, So I can move the funds into my operating account and show the revenue, right? So that's the flow. So I'm going to jump into quick— come back into Suzanne. What I'm gonna do is go into her trust account. So I'm going to click there. She comes right up. I don't have a big list. I always want to jump in and do a big list, but I don't have to. So I'm going to come in here and take a look. And I love this because I can actually click here and I can see the invoice, right, that I have there. And I can load the transactions in this account as well. So we're letting it go. Takes a little bit of time for this part of it to populate, but it's just pulling up the transactions that are actually in LeanLaw. And then I want to pay this invoice. So here's my one trust transaction. So if I had multiple here, it would show really the overview of the trust account in the LeanLaw side. I'm going to record the payment. So I'm going to record the payment. So I'm taking the money out of this account. And moving it into this, taking the money into here to pay this, and then I'm going to move it to my own bank account, as you will see in the next step. So I'm recording the payment. And I can hit Record Payment here. When I do that, there's no open invoices. And now you can see the trust balance is down to $3,720. So now let's go into— I can click here and see this in the trust account. So this is going to pop me right into QuickBooks and show me that one trust account with the flow. $5,000 in, $1,280 out. Perfect. But now that money got put into QuickBooks. That transaction of the recording of the payment went into QuickBooks. But how do I know the money went anywhere? So for some attorneys, they— and depending on your state, you can actually transfer the money from trust to operating. It's legal to do that. You can do that as far as a compliance thing. And it's okay to move the money trust to that. I prefer doing it one at a time. So we have this beautiful flowy paper trail to show where the money went to. I don't like to group them, although you can. It's not a bad thing to group them. But for some people, I like to do it one at a time, make the transfers one at a time. It really depends on how big your list is. Some states you're not allowed to do that, you actually have to cut a check. So it's really preference of the, of the user, right, the operator. But I want to come over here. And as you will see in my bank deposit in QuickBooks, I've got this Suzanne Keir, Where she's paid me the $5,000. I guess I should deposit that in, right? So I'm going to deposit that one in on 9/9. That should have already been deposited. I received it and I didn't deposit it. So that went into the bank. And now I'm going to put the revenue in the bank. So that went into my trust account. Sure. Okay, so right there, I made a mistake. As you can see, I didn't check my accounts. This is super important because this is the last one I did. And it went into the bank accounts. So all you have to do is come over here to the dropdown and change it to Trust, hit Save and Close, or Save and New in this case, because I'm going to do another one. And I'm going to grab this other Suzanne Kier. So now this Suzanne Kier is a $1,280 that I'm going to move as a bank transfer from the Trust account into the Operating. So I'm going to actually deposit this one into the Operating account. I'm actually glad I did it that way. So you can see the mistake, and then Save and Close. Now if you want to double check, triple check, super check your balances, I'm going to come back over to LeanLaw. I'm just going to hit Trust Account. So now we're going to pop back into LeanLaw. And as you can see, it's a thing of beauty. All the amounts line up and they're exact. That's what you're looking for. So hopefully that is helpful, a helpful short video, but I hope it helps you to understand the flow of when you are ready to charge a client for revenue that's recognized. So the attorney has done the work, they've billed it out. And now they're going to apply that deposit that they received, that prepayment, towards the invoice that's generated from the work that they've done. So they're receiving and recognizing the revenue. I hope that helps. See you on the next video.
