The Great Divide Structure your Law Firm Data

Hi there, Linda Artesani, Artesani Bookkeeping. So this week, we're going to go back into reporting, back into talking about departmental reporting. So reporting by class is what the terminology is for QuickBooks and QuickBooks Online. So as we start to get into this, this is a subject that I run into a lot when I start to work with the advisory stuff with the, with the lawyers that I work with. So a lot of the law firms, there's a couple of partners, they want to track their revenue by attorney. In the class way is the way to do it if you don't have an app like LeanLaw, which will track it as well. So I try to encourage the attorneys— I mean, LeanLaw is very affordable— just to have that for their time and billing. It saves time if they use it. And then we have much, much more granular reporting that we can get into the nitty-gritty of all different ways of tracking the client side of the data for the attorneys right in LeanLaw. But if you don't have LeanLaw and you're using QuickBooks the manual way, you can track it by class tracking. Obviously, for class tracking, you know, you want to— each attorney is going to have a name, and I'm going to take you into QuickBooks and show you how that works. Each attorney will be a class. You're going to track both sides of the transaction. You're going to do the revenue side as well as the expense side. You want to see it all. One of the, one of the things about QuickBooks Online as opposed to Desktop is you don't get the balance sheet by class report in QuickBooks Online that you have in Desktop. Hoping that someday that comes along. But, you know, QuickBooks Online is ever evolving. If you have Fathom with QuickBooks Online Advanced, or you buy Fathom and put it on top of QuickBooks Online Plus, you will have the ability to do departmentalized reporting. Although, in my opinion, Fathom is not an intuitive program. I am really excited. I'm in the beta testing for the new data metrics stuff with Intuit that they announced at QuickBooks Connect. I am in love with it. It's fabulous. It is so much better than what I've been able to play around with in Fathom, although Fathom does give me the ability to do the KPI stuff. So I do love the KPI stuff. I do love the ability to pull in data, a data source like from an Excel spreadsheet. There's a lot there in Fathom. It's just for me, the program, I always have to really think really hard because it doesn't make it so that I can figure out where things go like I can in any other program that I've used. So let me take you into the program and I will show you how to set up QuickBooks to use classes, and then how to find your way around Fathom. So let's go there. So here we are in my Proper Trust demo file. And it's a QuickBooks Online Advanced. You can see right here that I have Priority Circle, which is concierge kind of help. So if you ever Get the benefit. Once— there's tons of benefits to QuickBooks Online Advanced, and Priority Circle is one of them. If you have any clients in that, you really should take advantage of that. So let me take you to the settings. So one of the things we need to do is come over to Settings and make sure you've activated classes. So we'll come into Account and Settings. And I've already activated classes in this file. You're going to come to Advanced. And then you can see here right under Categories. So we're gonna come over here to Edit, and you would turn it on. So you're going to check this off. I like to make sure that I check off this box that says Warn me when a transaction isn't assigned to a class, because you don't want to have non-specified on your reporting. So if you have that piece put in there, it will remind you if you forgot to tag even one line, because you're gonna have to tag the line items in an invoice. So this is one of the ways you're going to be able to track class. You could do multiple attorneys in an invoice if you have that happening in the firm. So you want to be able to make sure you tag every line item. So I'm going to hit Done here. The second thing you're going to want to do is you're going to want to create the classes. So I've got 2 attorneys, actually 3 attorneys, one works on the outside. So I'm going to put all 3 of them in here as attorneys. I'm just going to want to All Lists, I'm going to come to Classes. And then you're just going to add new and I just added their names. And so you can see here I've got Ali McBeal, Alex Jones, and Alicia Florick as my attorneys that work in this company. So now once I have that in place, I want to come over to the invoice and make sure that I tag the invoices as with the attorney, right, because I want to make sure that all these attorneys are listed on my— on the job. So open one up here. It's an older one. I've opened up this invoice and you can see that it's not tagged by an attorney. So I can add here Alicia Florick to this, to this invoice. So what you'll be doing is you'll be adding the attorney's name as a class on these invoices so that you can track all of the attorney invoices by the class that you're trying to track as well. You want to go into your expenses and do the same thing. So let's go into the expense side. And I'll just show you now that we've activated it. Here's a check written out. And it's for this case, Chris Helmsworth. And I know that Alex Jones worked on this. So I'm going to tag it here with the name of the attorney that I know was of record on this. So that just tracks the income and expenses. So if you ever wanted to do a profit and loss report by class, by attorney, you'll be able to run that as well. If you're just tracking, most of the times they just— all the attorneys want to do is track the revenue side. They're really not that concerned about the expense side. Most of the expenses in law firms are billed back to the client. So they really want to just track that revenue side. So you really want to track that in the invoices or any sales receipts or any transaction that's got to do with it, with it, with a client. So what I'm going to do now is I'm taking you into Fathom and show you how Fathom works. So like I said, Fathom, not that intuitive. So you can see here, I've already got this report showing and you can see The unclassified is showing up with any transaction that's not classified, including balance sheet stuff. So including the cash, the bank account, the savings account, those things are not classed. And so if you're going to start to track with classes, you might want to make a general and administrative one for any oddball transactions. That way nothing comes up unclassified. You want to make sure things show up as classified. So as you can see, most of the things here are not classified. So how did I get this report? This is the hard part. So here I am, and I didn't, didn't title the report, but here I am in the Report Center. So when you log in to Fathom, you're going to go to— to get to Fathom, take you back there. We're going to go into Reports in QuickBooks, and then you can see Open Smart Reporting Powered by Fathom. So here we are in Fathom, and I am in my proper trust company, but normally it would take you to the main page. I only have one company in here right now. I'm still working on getting my clients to Log in as their admin or master admin and then add their Fathom into my file. That's the way you have to do it to add everything to your Fathom account. You cannot have them create their own because then you lose the ability to use your templates. So it's really important that when you get a client with QuickBooks Online Advanced, you make sure that you have them help them go right into Zoom and help them log in. They have to be master admin and then they can add you to— you can add them to your Fathom account. So that's the only way you're gonna be able to get all these templates and these KPIs that you've built without having to do the repetitive work over and over in each individual file. So it's really, really super important. So as I'm here in this section, as I logged in, you can see that I've got my choices of companies. I mean, I want to stay in the proper trust. And then I've got this little toolbar on the side here. I want to go over to reports. I'm going to create a report, create one from scratch. And I'm going to name it profit, and loss by department. And I'm going to do for the year. And I'm going to create the report. So now I'm creating this report. This is where you can add tables and financials. So you can come right in here. This is where you add the department. So one of the steps you have to do is in your settings, once you've added all the classes and added all that in QuickBooks, you actually have to go into the settings on this file. And connect that you're using classes. If you miss that piece, you're never going to be able to pull this in. So here we are, and you can see I've got this open. And, you know, this is one of the things I talked about with Fathom not being intuitive. You know, the bold lettering doesn't always mean to me that you click it, but it does here. And then you're just going to pick Financials by Division. And then this is the other part. You actually have to click on the report in some place to get it to populate in your report. So another thing that you might not recognize, and I'll take you to the settings too, so you can see where that is. So here I can see that Alex Jones had revenue of $900. And then Ali McBeal, and then we've got that unclassified, and that's caused by transactions in QuickBooks that don't have a class attached to them. So that's where you have to really do the legwork and make sure everything has a class attached to it. So you make sure that that— so this doesn't show up with all this unclassified stuff, and it's unclassified in the bank account. So the balance sheet side is affected as well. So you really need to make sure you go in and make sure this is all set up properly. And then you can see that this brought it all in and brought in all my transactions that I have attached to the file that are attached in the profit and loss by class or division, and then also the balance sheet. So you can get that balance sheet by class report in Fathom. You can't get it in regular QuickBooks Online right now. You can get it in Desktop. So one of the things too, is we come into the settings, and I'll show you where I had to add to my settings. Come over here. It takes a second to load for some reason. I'm not quite sure why, but it does. So as you come in here, here's what I was telling you, you can add the class tracking. So you have to make sure that— see, this says 3 at imported already. So once you add the classes, that's your first step. Add the classes, activate classes, add the classes, add the classes to all the transactions. Now you come into Fathom. Now you start tracking them and you have to just hit Edit and then track them and then it will update the file and then you'll have all that in your reports. If you don't do this step, you can't get that to populate. So that's it in a nutshell on how to add class reporting into QuickBooks Online and have that work. with Fathom. There's reports in QuickBooks. If you don't have Fathom, you can go right into QuickBooks. Profit and Loss by Class is a canned report. And you can do that straight up without using Fathom, but you won't get the balance sheet, but you'll get the profit and loss. And like I said, most of the attorneys, that's what they're looking for. My best way though is LeanLaw because there's a whole bunch of reports in there based upon each attorney and revenue by attorney that it's in there. So that's where you'd want to head to if you have Lien Lot. That's really where you want to head to for the reporting for the client side of the file. And then you can also take those reports, export them to a CSV, open them up, bring them in Excel, and then bring them into Fathom. And you can start to pull that data in and play around the data right in Fathom, which is really cool. So hopefully that helps. And I'm hoping that it— hoping that this video explains it a little bit, how to get those reports out of QuickBooks into the hands of the attorneys and the law firms that you're working with, or any company you're working with. I've done departmental reporting with real estate companies, landlords that have multiple properties under one corporate shield. It works well. They have one company owns several properties, different locations. They're going to need to departmentalize or classify it so that they can do the tax return. That's the real reason behind having to separate those. And this way you can have— I had it where companies are under different company files. Don't forget, as, as ProAdvisors, we get that deal where you can have the multi-company deal where you pay one price for the wholesale, and then each other subsequent file that's underneath there is $5. Why wouldn't you separate them and then have the Fathom report bring them all together in one big report? You can actually add companies to it and show all the companies under one division. So that's another way of doing it in Valdemar. I hope that's helpful. This week I'm at QuickBooks Connect Canada, so I kind of taped this one ahead of time, but I wanted to at least share this information. If you have any questions, comments, please feel free to reach out. Thanks for watching. Bye now.