How client money (trust) works in [[brand]]

Money a client pays over for you to hold — a deposit on account, money for transfer duty, the proceeds of a sale — is still the client's. It is not income, it is not the firm's bank balance, and it never goes into VAT or tax. Bala keeps it on its own screen, Money held for clients, under Payroll & stock in the menu.

In Botswana and across the region, the rules for attorneys' trust accounts come down to the same three things: the money is kept apart, every client's share is known at all times, and no client's balance may ever go below zero. The screen is built around those three.

One trust bank account, a ledger per client

At the bank there is ONE trust account that holds every client's money together. Add it once with Add the trust bank account (top right). Each client or matter then gets its own ledger with New client ledger — a ledger opens no bank account; it only keeps count of how much of the pooled money is that client's.

The page says this itself under How this works. Firms moving in often read "New client fund" as "a bank account per client". It is not: one account at the bank, many ledgers inside it.

• •Open Money held for clients.
• •Press Add the trust bank account. Fill in What to call it, Bank, Account holder, Account number and Branch code, and answer Interest-bearing (No — pooled client money, for the ordinary trust account). Press Add account.
• •Press New client ledger. Give it a Reference (for example CF-001), choose Whose money is it?, say What it's about, and press Open fund.

The four kinds of movement

Every entry under Move client money names the trust account, the client's ledger and What happened. For a client's money there are four choices:

• •Money received for a client — a deposit landed in the trust account. The client's balance goes up.
• •Paid out on the client's instruction — you paid transfer duty, a seller, counsel. Paid to and Under what authority? are required.
• •Our fee, taken against a fee note — the only way held money becomes the firm's. It settles a fee note you have already sent.
• •Moved to another client fund — money moved between two clients' ledgers on instruction.

A payment can never exceed what that client holds. The system refuses it rather than recording it in red — and refuses it on the date too: money cannot leave a ledger before the day it arrived.

The firm's own ledger: bank charges

The bank charges the trust account fees. Those charges are the firm's cost, not a client's, so they must not come off any client's ledger. Two more choices under What happened handle this: Bank charge on the trust account (the firm's cost) and The firm's own money paid in (e.g. covering charges). Both go on the firm's own ledger, reference FIRM, made the first time you use it.

If charges are recorded and not yet covered, an amber banner shows how much the firm still has to cover. Pay the firm's own money into the trust account and record it as The firm's own money paid in — the banner clears.

Reading the top of the page

• •Client money in bank — what the movements say is in the trust account.
• •Owed to clients — the total of every client's ledger.
• •Last checked against the bank — the date of your last reconciliation. Reconcile every month.
• •Deficit — shown in red if client money in the bank does not cover what is owed to clients. Stop paying out and correct it immediately.

Common mistakes

• •Opening a second "trust bank account" for each client. One account; a ledger per client.
• •Invoicing a deposit. A deposit is requested with a trust deposit request, never a tax invoice.
• •Taking bank charges off a client's ledger. They belong on the firm's own ledger.
• •Recording a fee as a payment out. A fee is settled from a fee note, so the firm's income is recognised once and the client's statement shows what the fee was for.