Paul W. Carlson, CPA (00:00):
Hey, this is Paul Carlson, CPA, with Law Firm Velocity. This video, we're looking at how to use Soluno to manage some quite complex immigration cases. An example we're going to walk through, this is for an immigration firm that has a couple of different nuances on how they run cases. So one is it's for corporate immigration work and they often will create invoices for work where the client hasn't fully agreed to start work with the firm. So the invoices are a quasi-quote. So we're going to create the amount in the system and keep track to see if the client pays for the fees, and then once we do receive that payment, then work will begin. So we actually need to bill in advance before the work actually starts.
(00:54):
Some firms like to keep two different trust accounts. One trust account is used to help prepaid fees and the other trust account is used to hold prepaid expenses. And so in this process, we need to monitor the trust balances in two different trust accounts. And then the third is Texas requires prepaid flat fees to be held into trust until milestones are met or the entire case is completed. This is a very different situation than a lot of places within the United States. In a way, though, it makes sense to do this because we've run into a lot of immigration firms that have a, I don't know, it's like an invisible prepaid debt that they owe clients four or five months' worth of work that they've accepted the prepaid flat fees. That money's gone into operating and it's been used to pay expenses and that money is no longer around if the firm shut down and they had to refund all the cases that were not completed.
(02:04):
That money's not around. That by putting the money into trust and pulling funds over as it's earned, kind of keeps the operating cash a little more clean. So what we're looking at here is this is Soluno within the client ledger screen and we're going to click through this with different steps as the case progresses forward. So first is we have the initial invoice for the client, that we're going to have a 4,000 legal fee, we're going to pull a 1,250 application fee for Homeland Security, and we're going to charge a client a $200 admin fee. So from that, we have an invoice for 5,450. Down below we can see that we have billed for 1,450 in expenses, $4,000 in legal fees, and we have AR of 5,450.
(02:54):
The next step is on August 10th, that now the client has paid the entire 5,450 balance and we deposited that full amount into trust. And so here we just add a line and in reading the Soluno report, these last three columns are trust activity balances. All of these columns are operating activity. So next step on this process is we're going to pull the application fee over into that secondary trust account and that occurred on August. And so I'm just stepping us through this because it's easier to see the process as we progress in steps instead of just pulling this up in one big report. So here, we had a trust disbursement where funds left trust account one and funds were moved to trust account two. There's another report we'll shift to in a second that will give you trust account balances by trust account, where here we just see overall trust balances.
(04:07):
Then on August 27th, we received the trust account money, we went ahead and we paid Homeland Security that 1,250 application fee. So here we have trust account two, money left. Our trust balance is now down to 4,200. The only odd nuance is when we write this check for 1,250 to Homeland Security, we also have to do a credit memo because this balance is no longer due from the client. We want AR and trust to be in sync, and so to remove that 1,250 from the AR balance, we need to do a separate credit note and we can explain that more later. And then finally, on September 2nd, we pulled over the full legal fee and admin fee from trust. So our trust account balance goes to zero. We show the 4,200 coming into the operating account and the case is financially complete. We can see that we billed 200 in admin fee, $4,000 in fees. We receive 4,200. We have no balance in AR and we have no balance in trust.
(05:32):
So this is nice because this gives us a full financial history of the file. In using tools like Clio and QuickBooks, you don't have one page with all of this detail. So this is a history of one case file. The other piece we'd want on this is a management report that would list the financial balances of all active cases. So I'm going to do the same thing. We're going to walk through that history. The trouble is this report's really not designed to go back into time. So it's going to continue to say that because the case is completed, it's saying we've billed 4,000 in fees and we billed 1,450 in expenses, because it's not retroactively pulling those out of billed, even though I'm putting in those end dates. It's not something you typically do. So August 1st, we can see that we have 5,450 in accounts receivable and we've billed 5,450. Go to August 10th.
(06:38):
And this is where we received payment from the client. And so now we can see that trust one has a 5,450 balance. Let's go to August 26th. And this is where we move the 1,250 for the hard cost from trust one to trust two. This is where this report becomes handy because we can now see how much money we have in each of the separate trust accounts. And on 8/27, we send the check to Homeland Security. And so now that trust two balance is gone and we can see that we have 4,200 in trust. And then like I said, just keep in mind that if this was up and running for a firm, it's going to list this little section for every matter and then it's going to give subtotals by client. So you could run one report and see the balance for all the active files within the firm.
(07:41):
And then we go over to September 2, and this is after everything has been paid. I believe we end up with a blank report because the report settings are set to once a client has no open AR, has no trust balance, that is just pulled from this report. All right, so there's a quick overview of how Soluno can be used to monitor multiple immigration cases with some sophisticated financial reporting requirements. Thanks.
.jpg)
