Background

The assets of Escrow, Trust and Retainer accounts are typically not associated with the operating accounts of the entity managing the escrow, trust or retainer. AccountEdge Pro allows you to manage Escrow, Trust and Retainers in separate accounts. In your company file, you create asset and liability accounts for this purpose. In the Escrow, Trust and Retainers management window, you name the trust, escrow or retainer, associate it with a client, identify the accounts, and receive and disburse funds. If a retainer is being handled as a deposit for goods or services, and you wish to deposit the retainer in your operating bank asset account, AccountEdge Pro will allow you to do this, as well.

When you receive funds into the accounts, both the asset and liability accounts are increased with the received amount. When you Spend an Escrow, Trust or Retainer from the management window, the payment is made from the asset account, and a corresponding debit is made to the liability account. When you receive a payment from the Escrow, Trust or Retainer account for your services, the payment is made from the liability account, and a corresponding journal entry is made, moving the funds from the asset account to your operating account.

If you use the Retainers feature as a deposit for goods and services, the client invoices are paid from the liability account, and the funds are already in your operating account.

Enable

To enable the Escrow, Retainers, Trust feature in AccountEdge Pro, place a check mark to its left in the Preferences (Setup > Preferences > Sales). When the feature is enabled, AccountEdge Pro will add a Retainers, Escrow or Trust entry in the Payments Method list.

You can indicate the default type (i.e., Escrow, Retainers or Trust) to use when new accounts are created, but the type can be changed when you actually create the account.

Initialize

To create a new Escrow, Retainer or Trust account, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window.

1. Click the New button
2. Select Type
3. Enter a unique name for this account
4. Enter a description
5. Link this account to a customer card
6. You'll need to create a liability account
   • Select Lists > Accounts from the top of the screen
   • Select the Liability tab
   • Click the New button
   • Type can be Other Liability
   • Indicate the account number
   • Tab to, or click in the Name field to name the account
   • Click OK
7. If the funds are held in an account that is not your main operating bank account, you'll need to create an asset bank account for the funds (this account must be different than your operating account)
   • Select Lists > Accounts from the top of the screen
   • Select the Assets tab
   • Click the New button
   • Select a Type of Bank
   • Indicate the account number
   • Tab to, or click in the Name field to name the account
   • Click OK
8. Select the liability account you created for the Liability Account for Tracking Funds field
9. Select the bank account you created for the Deposit Funds into Account field, or leave blank if you did not need to create an account
10. Optionally indicate your replenishment information
11. Click OK

Receive Funds

To receive funds into the account, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window; highlight a list item and click the arrow to its left, or the Edit button at the lower, right-hand corner of the window

1. Click the Receive button to receive funds into the account(s)
2. In the Receive window, the Deposit to Account will be set to the bank account you indicated
3. Enter the amount received
4. Press the tab key on the keyboard until the account and amount fields are populated
5. Click OK when you're finished

(There is typically no reason to indicate an opening balance in the bank account. This procedure will set both the bank and liability accounts with the fund amount.)

Use/Spend Funds

Spend Trust

You can record fund spending directly in the fund window. To open the window, click the Retainers, Escrows & Trusts button in the Sales Command Center to open the Retainers, Escrows & Trusts list window; highlight a list item and click the arrow to its left, or the Edit button at the lower, right-hand corner of the window

1. Click the Spend button
2. In the Spend window, select the Client card
3. Enter the name of the payee in the Pay to the Order of field
4. Enter the payment amount
5. Press the tab key on the keyboard until the account and amount fields are populated
6. Enter a meaningful statement on the transaction memo line (in yellow check area); this information will display on the Retainers, Escrows & Trust statement
7. Click Record when you're finished

Invoice/Receive Payment

For the services you've performed for your client, you can invoice and receive payment from the Escrow, Retainer or Trust account.

In the Sales Module, click Enter Sale

1. Select the client card
2. Enter usual invoice details and amounts, and click Record

To receive payment, open the Receive Payments window

1. Select the client
2. Indicate the amount received
3. Click the Pay from Retainer button
4. Select the Payment Method (Retainers, Escrows & Trusts)
5. Click the Details button to select a specific account, if there is more than one for this client; then click OK
6. Click Record
   • You will receive a message indicating the funds for the account are held in a separate deposit account
   • Click Transfer Money to transfer the amount to your operating account; click Record in the Transfer Funds window
   • Click No Transfer if no transfer entry should be made

Use Retainer Funds in Operating Account

If funds are being held in your regular operating bank account, and not a separate bank account, you would receive payments for services performed or goods delivered by creating and receiving payment on invoices

1. In the Sales Module, click Enter Sale
2. Select the client card
3. Enter usual invoice details and amounts, and click Record

To receive payment, open the Receive Payments window

1. Select the client
2. Indicate the amount received
3. Click the Pay from Retainer button
4. Select the Payment Method (Retainers, Escrows & Trusts)
5. Click the Details button to select a specific account, if thereis more than one for this client; then click OK
6. Click Record