Operating Retainer Funds and Trust Funds are both types of client funds being held by your firm.
There may be a special situation that requires you to move operating retainer funds (client funds being held in your operating account) to your trust account. This operation is more than a banking transaction, as you want to make sure that you are tracking this transfer correctly for accounting purposes, and that your client matter’s trust ledger reflects correct information.
Step 1. Create Credit Memo
In order to remove the funds from your operating retainer, you will need to create a credit memo for the client’s matter. To do so, follow the instructions below:
1. From the Matters tab, select the desired matter and click Details or simply double-click the matter
2. Click the Banking Tab
3. From Transactions, click Action and select Credit Memo
4. Complete Credit Memo window
- Date of the transaction
- Amount. This is based on the available credit for the operating retainer. You can choose to credit the full amount or a partial amount.
- Type: Choose Wire/ACH-Out
- Method: Wire Transfer
- Pay To: Use the Firm’s Name, as this credit will be going to your Trust Account
- Bank: Choose the operating bank or business account where the funds are currently held
- Memo: We recommend that you enter a memo (note) to record what this transaction is. i.e. Transfer to [Client’s Name] Trust Account
5. When ready, click Save.
If you selected the full amount in your Operating Retainer funds, you should now see a zero balance in the operating retainer.
Step 2: Deposit Retainer Funds into Trust
Now that you’ve removed your client’s funds from the Operating Retainer, you will want to add the funds to your matter’s trust ledger. To do so, follow these steps:
1. From the Matters tab, click once to select the desired matter
2. Click Trust Transaction Deposit
3. Complete the Matter’s Trust Deposit window
- Date of the transaction. This date must be the same as the date of the credit memo.
- Amount. The amount must be the same as the credit memo.
- Type: Wire/ACH-In
- Method: Wire Transfer
- Payor. Use the firm’s name. The funds are coming from the firm’s operating or business account.
- Bank. If the matter is associated to more than one trust bank account, select the appropriate one here.
- Memo. We recommend that you enter a memo (note) to record what this transaction is. i.e. Transfer from [Client’s Name] Operating Retainer.
4. When ready, Click Save.
Your trust balance for the matter will be updated to reflect the deposit.
All set! You have now successfully transferred your client’s operating retainer into their trust account.