Laywer Firm Module
[ cloud business management software system]
laywer firm module
Basically for lawyers, they have 2 accounts.
1 is normal P&L account.
Another is called 'Client Account'.
When a client wants to sell a property, for example, the buyer will pass the deposit and then subsequent payments to the lawyer and the lawyer will act on his/ her client's behalf.
Once the necessary clearances have been sought, only the payment (nett of legal fee) be paid to the client.
Due the the client receiving money later, but lots of money in the lawyer's bank account, there needs to be a separate book to keep track of the money and their movement.
Hence the Client Account.
In a customer statement, refundable deposit will be shown as highlighted in red; will be shown as blue otherwise.
What we do:
Create 1 extra account in COA called clients account (cash and bank):
When buyer pay deposit RM1,080, we cash receive it from clients account to saving account.
Now clients account is at (RM1,080) & Saving account RM1,080
Then say our consultation is RM820, we invoice RM820, then make invoice payment of RM820 to clients account.
Now the clients account will be (RM1,080) + RM820 = (RM260) & Saving account = RM1,080
The remaining RM260 will be pay back to client using cash payment from saving account to client's account.
Now the clients account will be (RM260) + RM260 = 0; where as saving account = RM1,080 - RM260 = RM820 (Your consultation margin)
At the same time, the invoice captured will have RM820 record to the revenues account:
to be shown in P&L.