Law Practice Accounting Using QuickBooks
QuickBooks generally covers default and general chart of account which the user can modify as per the requirement of user’s industry. There are certain QuickBooks Editions: Premier professional service edition, the user can have customized chart of account according to industry’s requirements.
1. Bank Accounts
The user has to setup all the bank accounts separately. To make transaction easy for a person working in bookkeeping/Accounting, all the bank accounts can be linked/tied to online banking.
The user can access all just by right-clicking chart of accounts on bank account and then click on “Setup Online Service.” There are certain banks that offer free direct connection, where certain banks are charge minimal monthly fees for the service.
QuickBooks Online generally supports free direct connection to user’s bank account.
Trust Account should be considered under and setup as separate bank account in the name of Law firm or Lawyer. To minimize the risk of getting amount deposited into incorrect bank account or banking errors, it may be a way that you setup trust account of firms at different banks.
The clients should have separate trust sub-account under the trust bank account (main) or under the trust liability account. The whole process is dependent on how you setup trust account in QuickBooks.
How to Setup A Trust Account
- Create a new account
- Enter the name which refers to the client.
- Make it a sub account of trust liability account/main trust account.
How to Track Time in QuickBooks for Both Paralegals & Attorneys?
There are two ways through which, you can track time in QuickBooks
- Single Time Activity
- Weekly Time Sheet
1. Single Time Activity
Single Time Activity does not let the entry of more than one block or matter of time. The timer feature in it is equipped with “Start”, “Stop” and “Pause” that helps user keep track on billable time.
However, if you wish to have your staff using timer under Single Activity Entry, the staff needs to open QuickBooks, all at the same time, requires multiple QuickBooks Licenses.
Now, this can be bit expansive for even a small firm. QuickBooks online does not carry this timer version. QuickBooks Online does not have both the timer functions.
2. Weekly Time Sheet
Weekly Time Sheet has always been a recommendation for the firm to track time.
Follow the instruction to go through Weekly Time Sheet:
- Maintains cash basis balance sheets.
- Select appropriate employee and week for time entry.
- Enter the projects for that particular week.
- Click on correct customer & Job.
- Associate them with service item.
- If you process payroll through QuickBooks, then only, payroll item column is necessary.
- Fill the notes mentioning the activity/project completed in that particular time period.
The notes will then transfer into client's invoice.
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