Why do my Trust Account transactions sync into two accounts in Quickbooks Online?

Objective:

  • Trust Account and Trust Liability Account in (Quickbooks Online) QBO
  • Where do my Trust Account transactions go in Quickbooks Online (QBO)?
  • Why do I need to have a Trust Liability Account when syncing Trust Transactions to QBO?

Environment:

  • Clio Web App
  • Quickbooks Online

Additional Information:

What are the Debits and Credits when my Trust Account syncs to Quickbooks Online?

Answer:

When Trust Account transactions sync from Clio to QBO, there will always be an entry in the Trust Account in QBO, as well as the Trust Liability Account. 

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

The Trust Liability Account is necessary, as funds held in the Trust bank account are not considered assets, but instead are considered Liabilities. The Trust Liability Ledger tracks the Trust funds so they don't appear as assets.

 

 

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