Client trust ledger (custom reports)

1

I have to manage client funds in a mixed trust account (I am a legal practitioner). I have managed to set this up using control accounts and per-client special accounts.

How would I go about creating a custom report to produce a client trust ledger on demand?

Here is a sample of a compliant client trust ledger:

Date 2020 Particulars Receipts Disbursements Balance
Aug 30 Mortgage advance 40,000.00 40,000.00
Aug 31 Transfer to Taylor 40,000.00 0
2

Hello @RiotPropeller,

Welcome to the forum.

Depending on how many clients you have, it’s possible that Divisions could be a possible solution to your case.

3

Seems like a big hassle to setup divisions for every single client. Some client trust accounts are less than US$500, for example.

4

Idealy, you would have a separate bank account per client and this way you can create a separate Business file per clint.

However, what you have is mixed fund which couldn’t be split into multiple business, for practical reasons as you already know.

The next best option is to use Divisions – which could be thought of as small businesses within a business.

At first I thought that this could be cumbersome when I said this:

However, giving it a bit more thought, 1 division per client isn’t too much work compared to what you are already doing:

I imagine each client has 1 control account and multiple special accounts.

Now:

Option A

You could leave the current setup as-is and add 1 Division for each client which you can use to get quick reports.

If you already have to setup a control account + 1 customer account + 1 special account; adding a Division is only 33% more initial setup – not that bad if you ask me.

Option B

Alternatively, now that you have a Division for each client, you can do without the control account. You will have a tidier balance sheet, more reporting options and no additional steps for initial setup – This would be the setup of my choice.

Option C

A leaner but a bit riskier option is to just use 1 Division per client together with Ordinary Balance Sheet Accounts – no need for any special accounts. That’s less work overall.

This will work wonderfully for sonewhat automated workflows, however, for manual bookkeeping I wouldn’t recommend at all since you need the redundancy of Customer and/or Special Account as an internal control.

5

I appreciate the detailed response but this is not necessary and will create a lot of overhead.

I have followed this and it is successful with tracking client funds in a mixed trust account:

Now the issue is reporting. Manager has custom reporting, but the documentation is weak on setting up the logic for custom reporting. All I need are custom reports now to comply with my legal regulations for reports and records.

6

I have used Manager.IO for a legal practitioner, here is something like what I did (some of this may cover what you already have set-up) - I don’t necessarily see a need to use divisions here, they have no base level accounting effect, and I think may cause confusion in this situation

  • Created a ‘Special Accounts’ type control account titled ‘Trust Liabilities’ or something like that
  • Created special accounts (in the Special Accounts tab) for each client assigned to the Trust Liabilities control account, this is each clients trust account, it is different from that client’s accounts receivable account
  • Created a ‘Bank’ type control account called ‘Trust Funds’ or something like that
  • Created a bank account for each trust funds bank account they had assigned to that control account
  • Also, created an accounts receivable account for each client
  • When we received trust funds (a trust deposit), recorded a receipt (with payee type as ‘Other’, typed in the client name, you don’t want to mix this up with Accounts Receivable transactions, trust accounting effectively acts as a separate set of accounting records) into the relevant trust funds account, with the line item account: ‘Trust Liabilities-[select client name]’
  • When they completed work, created an invoice again that client accounts receivable account
  • To record the payment (by transferring funds from the trust account to their operating account), created a journal entry as follows, each line item is for the amount of the payment (unless the payment is against multiple invoices): Credit ‘Client Trust Funds’, Debit ‘Client Trust Liabilities-[select client], Credit ‘Accounts Receivable-[select client]-[select invoice]’, Debit ‘[your operating bank account]’; this: showed the removal of the funds from ‘Trust Funds’, reduced their recorded trust liability, showed the decrease in accounts receivable resulting from the payment from trust, recorded the receipt of money into their operating account.
  • Alternatively, instead of using the journal entry for the whole, we could have created an inter account transfer and journal entry each time, the inter-account transfer would have recorded the transfer of money from ‘Trust Funds’ account to operating account, and the journal entry would have been: credit accounts receivable, debit trust liabilities
  • To see each clients trust ledger (it should look about like the one you showed), navigate to the Special Accounts tab, and select the desired clients.

I hope this helps; I understand the double entry description may be a little confusing if you’re not a professional accountant, if you have any further questions feel free to post them here

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