Fundamental to trust accounting is its ability to keep ALL transactions (deposits, checks etc) of a matter separate from other matters. All bank trust transactions must have a corresponding matter associated. This way, balance at a matter level is readily available and a summary balance report can be printed which totals up to the bank balance.
There are many specialized situations where it is not feasible or practical to write a separate bank check at each matter level or make a deposit at each matter level. A hypothetical example of a practice is illustrated below:
A firm "ABC Escrow" works as an interface between insurance brokers and insurance company. Brokers make policy payments to ABC Escrow and ABC Escrow delivers consolidated payments to the insurance company. Say ABC Escrow has 100 insurance broker clients and uses Easy Trust to manage funds coming in and out of its escrow account.
There are many situations where a single trust credit (deposit) received needs to be credited to multiple matters and a single trust account debit (withdrawal) needs to be debited from multiple matters
Step 1: Create a transfer matter. Create a new matter called "Internal Funds Transfers". This matter will be used to receive that single deposit or to issue that single check.
Case 1: If a single deposit is received and is to be credited among multiple matters:
- Ensure transfer matter is selected.
- Using the Trust Transaction button, enter the received deposit in the transfer matter. Payor would be the party issuing (e.g. Insurance Company). Transfer matter will show received funds as a balance which is now ready to be distributed.
- Within that same transfer matter, using the Trust Transaction button, enter an Adjustment Out for the same amount. That matter should now have a zero balance.
- For each and every matter affected, you must enter an Adjustment-In for their portion of the deposit, with proper memo notes. It is very important that the total of these Adjustments match the total original deposit.
Case 2: If a single check is to be issued out of the trust account:
- For each and every matter affected, you must enter an Adjustment-Out for their portion of the withdrawal, with proper memo notes. It is very important that the total of these Adjustments match the total of the check about to be issued.
- Next, ensure the transfer matter is selected. Using the Trust Transaction button, enter an Adjustment-In for the total amount of the check that is about to be issued. Transfer matter will show received funds as a balance which is now ready to be disbursed.
- Lastly, Issue a single check out from the transfer matter to Payee (e.g. Insurance Company). Ideally, at this time, transfer balance should have become zero.
Note that this process is not intended to record invoice payments.