I am an attorney. I have client trust account to hold money that I have not earned or to pay clients' expenses out of for their case. The client trust bank account has client trust accounts for each client in it. The client trust accounts a other current liability and trust liability accounts. I also have a credit card bank account. This account is set up to receive credit card transactions from clients for retainers and to pay invoices. A retainer when received in the credit card account has to be transferred to the client trust bank account. I do this so that transactions do not come directly into the client trust bank account (to prevent fraud, etc.). However, I don't know or understand how to transfer the retainer funds from the credit card bank account to the client trust bank account while keeping the funds assigned to the individual's separate client trust liability account. Does anyone have any ideas? Does this make sense. I appreciate anyone who answers and you may email directly to [email address removed]. Thank you. Ron
The problem is that retainers are being deposited into the credit card account, IMO, where they get "stuck" as tricky to make funds transfers from a credit card to a bank account..
1. Client funds are 100% segregated in trust account(s) as they appear to be
2. Credit card account is used only for client items (how about commissions and fees?)
3. Client sub-ledger (liability) should always balance to client trust account (CTA) and CR/DR balance of client credit card account (CCA)..
4. Any balance payable on the credit card is a "permitted" deduction from the CTA in balancing to the client ledger
5. You have set up a bank feed to download your banking transactions directly into QB or QBO. (This will enable quick matching of transactions already entered and easy data entry from the feed as to the disposition of bank and credit card transactions).
R1. Retainers should be deposited only to a bank account and not to the credit card account. If necessary, open up a second CTA bank account if your concern over risk of fraud is valid. Transfer retainers from CTA2 to CTA1 frequently.
R2. Settle CCA as per normal banking terms, drawn upon CTA1. Any non-client items should be separately reimbursed from the firm's account or, preferably, avoided..
R3. Charge CCA disbursements to the client subledger from the bank feed. Any non-client items should be charged to the firm's cost accounts. Update this frequently (daily?).
Your Client sub-ledger should then always be in balance with your CTA (1+ 2) less your CCA balance of client disbursements not yet reimbursed from the CTA.
And, to answer your original question, the bank transfers would then be able to be made, and be recorded in QB/QBO.
Hope I understood your issue correctly, and that my thoughts help.