Example of Receipting Trust funds received before the appointment date

There are two approaches that can be used to record transfers from the practice trust account to the job account when there are receipts like a directors contribution, received before the appointment date which subsequently need to be transferred to a job's bank account following appointment.

Method A - Transactions not linked to a Job

1. Receive trust funds dated the day funds were received.
(Do not select a Job to record the initial receipt)

Using #SHORTNAME in the MEMO may assist with reconciling the funds that have come in with what has been paid out for each job. This option is explained in the article Trust account audit report.

2. Transfer funds to the Job

a. Record a Payment out of the trust account reversing the initial entry. This payment can be dated the day the transfer takes place, which will be in the appointment period.

This reverses the original trust receipts. Again use the #SHORTNAME in the memo if you want to reconcile/audit your transactions.

b. Record a receipt in the Job bank account. Ensure this receipt is dated during the appointment period.

Method B - Record the Receipts and Payments linked to a Job

Alternatively you can :

a. record the receipt in the trust account linked to the job and coded to director's contribution (or other relevant account)
b. then record a payment in the trust account linked to the job and coded to cash at bank.

Note

The reporting of the transactions for receipts and payments – in particular, the Form 5603 you will notice that if the receipt of the Director’s Contribution to the trust account occurs prior to the appointment date (as is often the case) and recorded accordingly in the Practice Trust Account, and then transferred to the Job Account on or after appointment. In this case the transfer from the Practice Trust Account will not be disclosed in the receipts and payments.

This means that if the dates are causing an issue, then consider Method A but if not then Method B may be more suitable.