welcome to our course on QuickBooks for attorneys this course will give attorneys
everything they need to know to manage the books and records of their law firm
using QuickBooks this particular video is an overview of what attorneys need and it
will help you set up the file so that you can manage your books and records using QuickBooks
attorneys should use most of QuickBooks the way every other business does however lawyers have
unique challenges that these videos will address you may well ask what does an attorney need to do
in QuickBooks that other more common companies don't need to do well attorneys are required to
record retainer payments when they get paid in advance and they have to make sure when they get
paid in advance they recorded as unearned income attorneys make the unearned income become earned
income as time goes by or as services are given attorneys have to keep track of every client's
balance and how much is prepaid and how much is owed to or from each client attorneys have to
give a retainer receipt when receiving payment in advance of a service given attorneys have to keep
track of specific expenses and allocate them and track them for each individual client and
these are the legal requirements that law firms have when managing their books and records what
does your practice file have well included in this course is a practice file that has a client list a
sample client list so you can imagine what it's like to manage your clients a vendor list these
are companies whom we pay for the services that we need a basic chart of accounts our preference
set in the Preferences window an icon bar of shortcuts to the only things that we will need
this icon bar is customized for our needs and everything in the icon bar is what attorneys
need and attorneys probably don't need anything that's not already up and saved in the icon bar
customize reports that suit our needs as the attorneys bookkeeper so the reports that are in
the icon bar are the only ones that attorneys need all the other reports you can disregard
and save yourself some time now if you don't know any of these six things or you don't know
how to create a company file please watch our videos about these topics and I have included
basic introductory QuickBooks topics as part of this course and I call them supplemental videos
and they're listed after the main videos so the first few videos you see will be things that are
specific to attorneys and then once you finish watching those if there's any knowledge you feel
you need to have you can go back and watch the introductory videos and they will give you the
knowledge of these six items plus more and then you'll be prepared to watch the attorney videos
again so what specific steps do attorneys need to do in QuickBooks to set up their file well first
they need an account in the chart of accounts called unearned retainer fees and whenever they
get a deposit from a client this will be the account that records the money amount until the
money is earned the type of account for unearned retainer fees is an accounts receivable type of
account that's because it does not matter what type of account it is it matters how the account
shows up on the financial statements we have to put an item on the items list called fees earned
and connect it to the income from fees earned account and I will walk you through this step
by step if you need to track your income you could have several income accounts and several matching
items for those accounts when I say track your income I mean have more than one income account
in your chart of accounts have a different income account in your chart of accounts for each of the
different services your law firm provides if you did that you would be able to tell the difference
between how much money you made from one service compared to how much money you made from another
but that's not something that you will get from this video series that's something you can easily
get from one of the Supplemental introductory videos so in the series of attorney videos we will
only have one income account and that is what we will use for our example and the last setup step
that's specific for attorneys we have to make a retainer receipt that's a document template that's
made from a customer credit memo and that's the document that we have to give to the client when
the client pays us in advance for future attorney services so let's take a look at the file and see
what's already there the icon bar in this file is set up with a shortcut to every window that we
will need to use during this course of course in a real situation a law firm might have to use the
main menu to open up one or two additional windows but we will save time by putting the shortcuts to
the windows that we need right here this way you don't have to memorize all these different main
menu choices you can learn that after you finish the course you should take a look at how things
are set up now from the main menu click list chart of accounts and of course if you know a little bit
about accounting or you watch the supplemental videos you know what the chart of accounts is I
have included this sample chart of accounts for the Ross a shyster law firm which is our example
company and it's the file that you're in notice it has most of the accounts that you already need
the only difference is I excluded the specific accounts that a law firm would need and therefore
we can put them on the list now let's add unearned retainer fee to the accounts in the chart of
accounts remember it's an accounts receivable type of account so once the chart of accounts is open
we click account new and we go down here and we click accounts receivable that's because unearned
retainer fees is an accounts receivable type of account click continue and you see accounts
receivable is in the account type pulldown click the account name and what what do they want us
unearned retainer fees so we're going to type in it's better if it's capital unearned retainer
fees and then we click Save and close good now unearned retainer fees are in the accounts and the
chart of accounts what else do we have to do to set up the file let's add our one income item to
the items list it's called fees earned and after we put it on the items list we're going to link
it to the income from fees earned account in the chart of accounts from the main menu click list
item list then from the bottom left click item new we agree it's a service so we click service
the item name will be fees earned let's put it in capital it looks nicer fees earn now let's connect
it to the account income from legal fees which is income now we click OK and now we can see we have
the item that we're going to place on an invoice every time we earn fees by doing a service for
the client and now the last setup step that's specific for attorneys let's make a retainer
receipt document template from a credit memo this way we can give our clients a document as proof
that they paid us in advance for our legal service from the main menu click customers create credit
memo the credit memo has a ribbon that can be opened and collapsed and the ribbon has three tabs
click the formatting tab and directly under the word formatting click manage templates then in the
in the manage templates window go to the bottom and click OK after the basic customization window
opens up click on the bottom left additional customization now here's where we decide what
columns and what titles and what headings will be on the client retainer receipt first let's remove
some of the things we don't need like purchase order and something like project and the only
major change we need to make is click where it says default title and change the words credit
memo to retainer receipt actually you should make it lowercase so that it will fit on the document
retainer receipt or you could call it client retainer receipt then when we click OK and then
click OK again and then click OK again and then click OK again you see the document no longer
says credit memo it says retain a receipt and we can print this and give this to the client when
the client pays in advance congratulations your file is now set up specifically for a law firm