KCS - How Does the Quickbooks Trust Accounting Sync Work?

Objective:

  • Understanding Trust Accounting Sync from Clio to QuickBooks Online

Environment:

  • Clio Web App
  • QuickBooks Online

Additional Information:

Please note that we do not currently support Check Writing functionality in QuickBooks. The following article describes what will happen if you use the Check Feature in QuickBooks:

A Double Entry is Created when I Create a Check in Quickbooks with the Trust Sync Feature 

Answer:

The Trust Sync will push all of the following to QuickBooks:

  • Manual additions or subtractions of trust funds
  • Matter to Matter transfers of trust funds
  • Payments made to Trust Requests
  • Payments on Revenue Bills from a trust account
  • Edits to any of these transactions


A Trust Account in Clio will need to map in Quickbooks to both:  

  • Trust Bank Account (an Asset account)
    • This bank account is an asset account that will match your physical bank account to hold the funds.
  • And a Liability Ledger (a Liability account)
    • Since any assets collected in the Trust bank account are not really assets but Liabilities, the Liability Ledger tracks the Trust funds so it doesn’t appear that the funds belong to you.

The reason is because Clio does not make use of traditional double entry book keeping. Therefore, we need to map the increases/decreases of a singular account in Clio to multiple accounts in QuickBooks under the double entry accounting system. This allows for 3 Way Reconciliation:

  1. Accounts in Clio

  2. QuickBooks

  3. Actual Bank Account Statements


A transaction to a Trust Account in Clio can be matched fairly straightforward in Quickbooks:

  1. A payment of money into Trust in Clio is a Journal Entry with:
    • A Debit to the Trust Bank Account (asset account) - Increases Trust Bank Account
    • A Credit to the Liability Ledger (liability account) - Increases Liability Ledger
  2. Removing money from a Trust Account in Clio for any reason is:
    • A Credit to the Trust Bank Account (asset account) - Decreases Trust Bank Account
    • A Debit to the Liability Ledger (liability account) - Decreases Liability Ledger
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