TRUST TRANSFER – BALANCING TRUST BANK ACCOUNTS

Author:                   Cindy Kruger

Date:                      February 2008

Audience:             Bookkeeping

Summary:              How to make sure your trust bank account balance equals the total trust creditors balance for that bank.

CONTENTS:

· Introduction

· Balance check in the Trust Transfer

· Processing correction journals

· Conclusion

Introduction:

LegalSuite has added a warning in the trust / business transfer program that will inform you if the trust banks need to be balanced and by how much.

LegalSuite has a “Default Trust Bank” account as a guide to which bank the matters trust funds have been deposited, but if this default is overridden by the user or if the trust funds have been deposited into another trust bank account it would mean that a discrepancy will occur between the “Matters Trust Balances per bank” report totals and the individual trust bank accounts in the business ledger. If there is a discrepancy, this does not mean that the system is out of balance because the total of the matters trust funds will be equal to the total.

Balance check in the Trust Transfer

When running a Trust transfer a warning will pop up. This warning informs you that your individual trust bank balances do not correspond with the matter trust bank balances.

Fig 1: Warning in the Trust Transfer

When this warning appears click on  button.

Processing Correction Journals

When the warning appears during the Trust Transfer then you need to balance your trust banks and your matter trust bank balances. LegalSuite has added a correction journal that you can use within the trust transfer. The correction journal is the same as posting a trust payment from one Trust Bank to another Trust bank.

Click on the  icon at the bottom of the trust transfer screen. The following screen will appear:

Fig 2: Trust Banks Screen

From this screen you will be able to see which bank accounts have a difference. Remember the total that appears under the Matter/Creditors column is totaled by the ‘Default Trust Bank’ assigned to the matter and not to which account the money was receipted into or paid out of. If you have receipted money into a Trust bank account that is different to the default trust bank account then the difference will appear on this screen. Firstly you need to check that the matters default trust bank accounts are set correctly. If you have receipted into a different Trust bank account then you need to change the default trust bank account on the matter to the correct trust bank.

Once you have checked the matters and everything is setup correctly but there is still a difference between the Trust bank balance and the Matter trust bank balance then you need to process a correction journal and then physically transfer the money between the Trust bank accounts.

To process the correction journal highlight the trust bank and click on the  icon. LegalSuite will automatically open a journal with that trust bank as one of the legs:

Fig 3: Trust to Trust Journal

Select the correct Trust bank account into which the funds must be moved. Click on

The Trust to Trust Journal will now be added to your other transfer amounts and will be displayed in green:

Complete the details for your trust transfer, print and post the Trust transfer batch.

Conclusion:

The Trust Fund check will help you monitor and control the funds sitting in your Trust bank accounts.