QuickBooks integrates easily with some of the popular case
management software packages, but it has no case management functions itself. At the bottom of the page is a link to the ABA's
table of small practice case management solutions.
Intuit has made the file setup as simple as possible with templates in the easy step interview to quickly get the chart of
accounts up and running for your practice.
The most difficult thing I see new users experiencing is the understanding of the management of an IOLTA or trust account.
Set up the account as a bank account AND a liablity account, typically entitled "IOLTA or trust liability."
It's very important to create a customized report for reporting on the balances by client/matter and to ensure that the bank
account and the liability account match, i.e., show the same $ amount. Memorize the report and put it in the icon bar using
the View function within QuickBooks.
Any costs advanced for clients with firm money are expensed to the "reimbursable client costs" account and then invoiced to
the client. Payment for those costs is with a check from the IOLTA/trust account that is applied against the invoice and
deposited into the firm operating account. A simplier way to understand this is if the firm's bank account or credit card
is used for a client cost, invoice the cost to the client. If a check is written from the IOLTA/trust account on behalf of
a client cost, you don't invoice it again, just use the "IOLTA liability" account in the expense area of the check and be
sure to fill in the customer:job field with the Client/Matter information.
To set up QuickBooks with case ledger card balances, a journal entry is done using the beginning date of the QuickBooks file
balances in the trust account by client/matter. The total of that journal entry matches the balance in the bank account on
that same date.
How to handle retainers is another common setup question. There are two ways to handle them (1) as a liability or (2) as a
negative account receivable. It depends upon the laws in our state and your business philosophy which method you choose to
use. Both methods are detailed in the help area in QuickBooks.
Setting up clients' billing rates and service items is worth spending a bit of time on.
Service items are the services that you do such as drafting wills, complaints, memorandums. They are associated with income
accounts. You must have these. Set the price to $0.
Billing rates are the hourly charges for paralegals, associates, partners, senior partners. You don't have to use them, but
your item list will be much cleaner if you do.
Price levels are the contracted rates or discounted rates for specific clients. These are really useful and avoid billing
mistakes or delays in issuing invoices because of research necessary regarding the rates, but many of my clients choose not
to use them because they want to show the discount given off their standard rates on each invoice.
Step 1: Set up your item list, associating each task or service with an income account.
Step 2: Set up your billing rates, typically by law firm title or if you are a small firm, by initials or last name.
Step 3. Associate the billing rate to each timekeeper.
Step 4. If you need price levels, set them up and associate them with the client/matter.
Flat fees are customarily handled by my clients with the "billable or not billable" checkbox. It's time spend on the matter,
but it's not billable. Some do, however, choose to show the time on the invoice and 0 it out with a discount item.
If you're not currently using QuickBooks Premier or Enterprise 2008 for Professional Service firms, I would suggest that you
upgrade to it. The 2008 version of the software includes the ability to see the value of any unbilled time in a report rather
than your having to create an invoice to see it. Also only the Premier and Enterprise selective industry versions of the software
include the billing rates feature.