P&L for attorney

@PregentBooks01966

@PregentBooks

@BettyJaneB

For this question: " that only includes the operating account and NOT the Iolta activity?"

There is a Mistake in how they set up and used QB. The IOLTA Trust Bank is only ever supposed to have Activity in and out that changes Client Liability. There is Nothing about the IOLTA Bank that hits the P&L. Anything you see as income or expense for that account is Wrong.

The data flow is like this: A Client pays a retainer, so use a Retainer Laibility Other Charge Item on a Sales Receipt, deposit to Trust Bank; IOLTA bank goes Up and Client Retainer Liability goes Up. Then, the Firm incurs Advanced Costs, as Other Current Asset. The only expense is Operating Expense. The only Income will be Fees and not reimbursed Advanced Costs.

The costs incurred for the client as Advanced Costs are Items linked to Other Current asset. They are marked for the Client as Billable.

The timesheets are where staff track billable or not billable time. That is Income to the firm.

Once you Invoice the client for their matter, use Add Time & Costs to select the Billable Advanced Costs. This Clears them from the Other Current Asset account. You also select Billable time here, and now this invoice is the data flow for Fee Revenue + advanced costs to be repaid = total Owed against this AR invoice.

And now you would use one Trust Check, payee = the Firm. On the Items tab you list the Client name, the Retainer Item, and the Amount they owe this time around, up to the total they have still on hand with the firm. if you are using retainer funds for paying multiple client's invoices from the firm, just keep listing it here as the Retainer item again and again, Job Tracking = assign Customer, or Client:Matter, and Amounts.

Now you have one Trust Check that you pretend just arrived from the Trust Department = process each of these splits as a separate Receive Payment.

You need some custom reports. What we just did is Get a retainer, then use some of it to pay the invoice for Advanced Costs + Fee Revenue. That means you need Custom reports, total by Name, filter on Liability, to see Remaining Balances and not over-credit their retainer balance. You also need to Reconcile the Liability account to an ending balance of 0 and only using 0, because you will mark as Cleared any name where all their activity leaves that name with 0 retainer on hand.

And custom reporting is used to prove Trust Bank matches Liability balance by Name, all the time, or some entry was made wrong, as when you see IOLTA Trust bank hitting Income or expense. That would be an Error in the transactions made.

Please see my attachment.