To create a trust receipt select the trust tab, the red courthouse icon, from the top menu bar.
From the trust register, select the receipt button.
The Received From field is the name of the person/company whom the funds came from. They do not have to be entered as a client in Wise Owl Legal.
The On Behalf Of is the name of the client whom the funds are for. They must already be set up as a client in Wise Owl Legal.
The Description field copies from the top half of the receipt to the bottom. However Wise Owl Legal allows you to change or add details to the description fields in the bottom section if necessary to allow for personalised descriptions for different matters.
IMPORTANT DISTINCTION:
There are two dates on the trust receipt page. It is very important to understand the difference in terminology!
The Rec'd On date is when the funds were actually received by the law firm. This can either be the date cash/cheque was put into the hands of the firm's staff or the date EFT appears on the bank statement.
The Receipt date is the date the receipt is written, and cannot be backdated!!!!! (under legislation surrounding trust bank accounts).
It is extremely easy for auditors to check when a trust receipt was entered, so if it does not match the receipt date this will cause your firm grief! So to avoid troubles, never backdate trust receipts.
After a trust receipt is finalised the Trust Account Receipt can be viewed and should be printed and filed for audit.
Form of Funds:
- Bank Cheque - Is purchased from the bank and is drawn on the bank.
- Personal Cheque - Is drawn on the private cheque account.
- Cash - Legal tender that can be used in exchange for goods or services. Cash is not the safest form of payment as it is easily misplaced.
- Credit Card - Allows the holder to carry out purchases on credit and to be paid at a later date.
- EFT - Transfer of funds directly from one account (third party) to another (law firm's trust account).
- NOTE: In Queensland firms are only allowed to have EFT transactions if they have been specifically approved by the Law Society, specifically for their firm.
- NOTE: In Queensland firms are only allowed to have EFT transactions if they have been specifically approved by the Law Society, specifically for their firm.
- Money Order - Purchased from a post office, then given to a third party. It is a way to transfer money in a convenient, safe way. It is similar to writing a cheque without having a cheque account.
- Telegraphic Transfer - An electronic transfer of funds primarily associated with transferring funds overseas.
For bank cheque and cheques, additional cheque details are required. If the bank you are after is not in the drop down list don't worry as it can be added by going to tools and settings icon (grey cog) > settings > appliance settings > trust accounting > manage list definitions > accounting banks > add record
IMPORTANT NOTE:
When funds are received in the form of cash or cheque and are to be banked by the law firm, the bank account on the trust receipt is Undeposited Funds. This is a separate bank account !
A bank deposit must then be completed when the funds are physically being taken to the financial institution to be deposited into the law firm's trust account. In Wise Owl Legal the bank deposit transfers the funds from Undeposited Funds to the General Trust Account.
To create a bank deposit:
- Select the trust tab, the red courthouse icon, from the top menu bar
- Select 'Deposit'
- Ensure the account for the funds to be deposited into is correct
- Enter the date as at today
- Add a description
- Select the transactions (receipts from cash or cheque) to be included
- Select 'Finalise and Print Deposit'
The description is what appears on the bank deposit and should therefore be representative of the source of the funds and their form or what the fund have been received for.
E.g. John Smith, Chq123 & Kelly Smith, Chq78 ; Settlement Funds Matter 11-1001
Protected Funds:
- Protected funds are unavailable for use until they are unprotected
- If funds are protected ensure you check the protect check box during the receipt creation as no changes can be made to a trust receipt once finalised
- Select the '...' next to the protect check box to enter additional details surrounding the protected funds
- Once a receipt is finalised the transaction will have a P in the status column to indicate its protected nature
Clearance Days
The clearance days relates to the number of calendar days before the receipted funds are cleared and hence available for use (can write cheques against).
The clearance days can be changed manually for each receipt or the form of fund defaults can be edited through tools and settings > settings > appliance settings > trust accounting > manage list definitions > accounting form of funds > add record
Unallocated / Allocated / Bank Balance
At the bottom of the trust receipt page unallocated, allocated and bank balance fields display.
A trust receipt cannot be finalised until the unallocated amount is $0.
A transaction must be locked once entered. Any attempt to change the transaction MUST NOT change the original transaction. A request for a change must create a new transaction, dated TODAY that has the effect of reversing the original transaction.
You should be extremely cautious when reversing trust receipts as trust accounts are a highly regulated and scrutinized aspect of law firms. Non- compliant trust accounting activities are the highest cause of lawyers being penalised or losing their practising certificates.