Mastering QuickBooks 2018 for Lawyers Training Tutorial

The Express Start feature lets you quickly create a new company file. It simplifies and segments the steps in the EasyStep Interview into shorter sections, so you can start using QuickBooks right away. When you first open QuickBooks, the option to create a company file using the Express Start feature is shown in the “QuickBooks Setup” screen. Learn this and more during this lecture.

In QuickBooks, you can also use the EasyStep Interview to create a company file. You complete the EasyStep Interview by entering information into different screens shown in the Interview. After entering information into a screen, click the “Next >” button to proceed to the next screen and repeat the process. After answering all questions in all the screens, click the “Go To Setup” button to start using QuickBooks. Learn this and more during this lecture.

After you initially create your company file, you should review the chart of accounts to add, edit or remove any accounts, as needed. Please review the lesson titled “The Chart of Accounts” in Chapter 3 of the Introductory QuickBooks manual if you need assistance in adding, editing, and deleting accounts within the chart of accounts. Learn this and more during this lecture.

After creating the company file and reviewing the chart of accounts, you should add any vendors to your “Vendor List.” You only need to add beginning balances for vendors to whom you owed money as of the “start date” of your QuickBooks company file. You can add more vendors to your Vendor List, as needed. Learn this and more during this lecture.

After you have finished creating your initial vendors within your QuickBooks company file, you should then enter any clients and cases who owed you money as of the “start date” of the company file. You can always add additional clients and cases, as the need arises, later on. Learn this and more during this lecture.

You can enable classes within QuickBooks to classify all transactions for reporting purposes. As used within law firms, classes often represent individual lawyers, partners, or departments within the firm. You can then create reports within QuickBooks that can detail transaction amounts by class. Learn this and more during this lecture.

Line items are simply the various types of items you create within the “Item List” for use within the line item areas in your purchase and sales forms. Since you will want to use the same item to track income for legal services provided, as well as expenses for payments to partners, you will set the items up as “double-sided services” within the “Item List” in QuickBooks. Learn this and more during this lecture.

In this section, we will review the processes that often occur within QuickBooks when dealing with a trust account. One type of trust account used by many legal professionals is an IOLTA or Interest on Lawyer’s Trust Account. Most lawyers use an IOLTA account to hold client funds separately from their own funds. An IOLTA account is an interest-bearing checking account. Learn this and more during this lecture.

If you use an IOLTA account to track funds in trust for use in paying client expenses, you should ensure that you create the necessary accounts within the QuickBooks “Chart of Accounts” window. Please review the lecture “The Chart of Accounts” in Section 3 of the Introductory QuickBooks manual if you need to reference creating and managing accounts. Learn this and more during this lecture.

In this lecture we will examine the items that you should create within the “Item List” in your QuickBooks company file to use when managing trust accounts. Please review the lecture  “Setting Up Inventory” in Section 5 and “Service Items” in Section 6 of the Introductory QuickBooks manual if you need assistance in creating reimbursable items. The items created will be “doubled-sided items” like the ones created in lecture “29.7- Creating Billing Line Items” within this manual. Learn this and more during this lecture.

In this section, we will review the transactions that you will need to use in order to correctly account for funds held within a client’s trust account within most, if not all, states. You should always be aware of the reporting requirements within your state and adhere to the regulations given. Learn this and more during this lecture.

In this lecture, we will review entering bills that are to be paid from the client trust account. Remember that when entering these types of bills, you will want to use the special “Client Trust A/P” account that was created specifically for this purpose. It is very important to remember to select this account from the top of the “Enter Bills” window when entering these bills so as to not enter these bills against the law firm’s A/P account. Learn this and more during this lecture.

In this lecture, we will review entering bills for minor expenses incurred for each client that can then be entered as a single bill for the monthly totals. This could be performed with a minor charge, such as postage, for example. You can enter a single bill for this at the end of the month and then split it amongst all of the clients who will, in turn, pay their portion of the bill from their trust account balances. Learn this and more during this lecture.

In this lecture we will examine how to pay bills from the client’s trust account using the “Pay Bills” window. If you need to review paying bills, please read the lecture “Paying Bills” in Section 12 of the Introductory QuickBooks manual. To start the process, select “Vendors| Pay Bills” from the Menu Bar within QuickBooks to open the “Pay Bills” window. Learn this and more during this lecture.

In this lecture we will examine using the “Client Credit Card” account to track and pay all client costs, if allowable within your state. Remember that if you do use a client credit card to NEVER mix charges between the client and the firm’s credit cards! Before you begin, you should review all of the lectures within Section 21 from the Advanced QuickBooks manual regarding entering and paying credit card bills. Learn this and more during this lecture.

Next we will examine tracking time for the partners and paraprofessionals within the firm. Note that if you wish to use time tracking for hourly billing, you should first set up an item for each partner or paraprofessional within the firm and assign their billing rates within the “Sales Price” fields. Learn this and more during this lecture.

You can also use QuickBooks to pay invoices created by the law firm using funds from the client’s trust account. Before you do this, however, you should check to ensure that there are sufficient funds within the trust fund to cover the invoice amounts. You should NEVER overdraw a client’s trust account, as there are severe penalties for doing this. Learn this and more during this lecture.

You can easily issue a refund check to return unused client trust account funds, if the need arises. To do this, first open the “Write Checks” window within QuickBooks. Then select the “Client Trust Checking” account from the “Bank Account” drop-down at the top of the window. Learn this and more during this lecture. 

In this lecture, we will examine using QuickBooks to return escheated trust funds. Escheat occurs when there are no legal heirs to property. Most commonly this is used to return abandoned trust funds to the state. Learn this and more during this lecture.

In this section we will learn how to create basic customized reports that are needed in order to manage trust accounts. This lecture examines creating the Trust Account Liability Proof Report, which is used to ensure the balance in the trust account is never overdrawn when paying the invoices from the law firm. Note that there are severe penalties in place for overdrawing a client’s trust account. Learn this and more during this lecture.

The next type of report that we will examine creating is the Trust Liability Balances by Client Report. This report can show you the liability balances for all clients. Once again, start by creating a custom summary report within QuickBooks. You can do this by selecting “Reports| Custom Reports| Summary” from the Menu Bar. Learn this and more during this lecture.

The next report that you will learn to create is the Client Ledger Report. This report will allow you to view the individual transactions that have been attributed to the “Client Trust Liabilities” account. Within this report, the “Source Name” column shown will be the “Payee” field for checks written and will be blank for deposited amounts received. Learn this and more during this lecture.

The next report that you will learn to create is the Account Journal Report. This report will allow you to view the individual transactions that have been attributed to the “Client Trust Checking” account. Within this report, the “Source Name” column shown will be the “Payee” field for checks written and will be blank for deposited amounts received. Learn this and more during this lecture.

This lecture provides a brief summary of the topics covered throughout the course and offers suggestions for further reading and learning materials. Plus, practice exercises and keyboard shortcuts located in the PDF manual.