00:00: This video demonstrates how to set up and manage accounting functions within CARET
00:04: Legal, including bank accounts, chart of accounts, and transaction recording. It
00:09: covers essential processes such as entering opening balances, recording deposits and
00:13: withdrawals, and handling vendor bills and trust accounts.
00:18:
00:29: All right, thanks everyone for joining.
00:31: We are going to get started just momentarily.
00:35: And to ensure that you're at the right place, this is the accounting training for
00:40: CARAT Legal.
00:53: All right.
00:53: On this training team, we will be covering books,
00:59: banks, and accounts payable items.
01:03: So just a few different things that we'll end up covering on this call.
01:08: We are going to be using training data and
01:12: more of a lot of fictitious entries, etc.
01:16: So just bear through some of those.
01:18: Some of them will be completely irrelevant to your firm,
01:23: but they are necessary so I can demonstrate some of these different tools for you.
01:29: All right.
01:29: At this point, you should be seeing my CARAT Legal dashboard in front of you.
01:34: And like I said earlier, we are talking accounting.
01:37: So we are going to jump into accounting over here on the bottom left.
01:45: From here, you should see your invoices and payments tabs for those of you utilizing
01:52: APX, your retainers request tab,
01:55: vendors and bills tab,
01:58: banks and registers, and reports.
02:03: makes up your accounting module here specifically
02:09: for today's training though we are going to be focused on the banks and registers
02:14: vendors and bills and reports we
02:17: are starting on the banks and registers tab let's
02:20: talk through some of the like necessary knowledge of banks and registers The
02:26: first kind of things that we like to see set up for clients either migrating or just
02:33: being freshly onboarded to Carrot Legal is we want to see in the drop-down a
02:40: bank account
02:42: for each bank account that you actually have at the bank.
02:46: So here in the drop-down,
02:48: if I had two operating accounts, I would want to see two operating accounts.
02:53: If I had a credit card account, I would want to see that credit card account.
02:59: And if I had a trust account or IOLTA, I would want to see that trust.
03:04: Undeposited, we will discuss just momentarily.
03:07: But in all, these are where I can see my bank accounts that reflect my actual bank
03:12: accounts and different banking accounts at the actual bank.
03:16: Now, if
03:18: you go to the dropdown and you do not have all of your bank accounts or your credit
03:22: card accounts, trust accounts, etc., you
03:25: can use the View Bank and Credit Card Accounts right here on the right to actually
03:31: select or add these accounts.
03:35: I also recommend renaming them so they're easy to identify in that dropdown.
03:39: down.
03:40: So when I go to view bank and credit card account,
03:45: here I can see all of my bank accounts
03:48: and my credit card account.
03:52: And I can edit each one of these accounts using the edit pencil.
03:58: Here I can rename it operating account.
04:00: Maybe I want to have the last four of the account number there.
04:05: Maybe I want to update the bank name, etc.
04:08: You can also add the last four digits
04:13: of the account number here.
04:15: Just keep in mind that this number that
04:19: you add here is not only the last four digits of your account number, but it also
04:24: becomes the GL account number for this bank account.
04:30: Okay, and I'm going to put one, two, three, four, so I can show you how that looks
04:34: later
04:35: in your chart of accounts.
04:36: I
04:38: may also set my operating account as my default account
04:41: so that every time that I come to the banks and registers page, this is always the
04:45: account that defaults in that drop down.
04:48: That's what it means by default.
04:50: Do I want this account actively displayed in the drop down? When I look at my bank
04:55: accounts, yes.
04:57: And last but not least,
04:58: do I want to connect this
05:01: bank account using Plaid and I'll show you what that is so when you click connect to
05:07: a bank
05:08: you will get Plaid pop
05:12: up here where you can go ahead and get started
05:16: enter your phone number for two-step authentication and
05:19: link your bank account so you'll need your bank account username and password and
05:25: Plaid will use that to
05:27: pull
05:29: in your daily transactions from the bank and secure it.
05:33: And
05:34: we'll talk more about that in a moment, but that's where you connect that.
05:37: Okay.
05:37: All
05:39: right.
05:39: Just to pinpoint that is separate from APX.
05:43: Okay.
05:43: With APX, you are going to establish your bank account so that APX can get your
05:48: money to you.
05:49: Where here, connect to a bank is completely separate from APX.
05:54: And this is you connecting to your bank so that you can see your daily transactions
05:57: at the bank in caret.
05:59: And again, we'll discuss that in just a moment.
06:03: Okay.
06:04: So I just did not hit save.
06:07: Let me go back over here.
06:08: Make sure I hit save.
06:09: Mark it as my default account.
06:12: I'm just going to put 1234 here so that we can demonstrate that in the chart of
06:16: account.
06:17: Okay, there we go.
06:18: If I needed to add a new bank account or a credit card account, I could, but I'm
06:23: just going to leave it as is.
06:26: So let's go back to accounting.
06:31: Seen some registers.
06:32: And in the dropdown, I should see where I added 1234 here.
06:39: There's that bank account.
06:40: Great.
06:41: And as we start to track stuff in carrot, any deposits.
06:44: to this bank account and any withdrawals out of this bank account, whether it's by
06:50: check or ACH, et cetera, should be displayed by
06:55: the transaction date, both recent on top, the type,
07:00: and the reference or descriptions.
07:02: And we'll talk more about that as we go.
07:04: But this is really your bank page.
07:05: This is where you'll set up your bank.
07:09: Okay, so in addition to the bank, you also want to make sure your report or
07:18: your books are set up as well.
07:20: So we touched on banks here.
07:23: Our books are going to be under reports,
07:27: accounting reports.
07:34: and then you can see I have my chart of accounts here my general ledger profit and
07:40: loss balance sheet etc trial balance but
07:44: really what I'm here to show you at the moment is the chart of accounts and
07:49: you can see I've flagged that little star beside the chart of accounts that
07:53: just makes it so that it becomes a favorite up here on my top right
07:58: and anytime I need to get to my chart of accounts I can just use the star select
08:02: chart of accounts okay just a little shortcut when you make it a favorite okay so
08:08: here is the chart of accounts
08:10: for my books and
08:13: I always recommend before we start doing transactions in carrot we want to get our
08:18: bank accounts set up and
08:20: that will add them here as a chart of account account
08:26: and we want to review the chart of accounts that we have.
08:32: So set up the bank account and
08:34: they become an account on your chart of accounts.
08:39: Then come over to your chart of accounts and review the accounts that are here.
08:43: Now, some rules of thumb with the chart of accounts and CARAT.
08:48: CARAT Legal does not really use the account numbers.
08:51: You can use them, and you can even edit those
08:56: account numbers.
08:58: Okay?
08:59: So remember how I did 1, 2, 3, 4 for the operating account earlier?
09:04: Here, when I'm looking at my chart of accounts, I can say, oh, I don't like how
09:08: that's displayed.
09:10: Even though I can store my last four digits of my card number here or my account
09:14: number, I'm actually wanting it to be more in line with the rest of the accounts.
09:20: So I'm going to use the account number, let's go with 1500.
09:26: Okay.
09:28: And now, as you can see, my account name will stay with that 1234.
09:33: But my 1234
09:35: account number, I'm just going to hit refresh,
09:40: will pop up as 1500 now.
09:43: Oops, well, I already have a 1500.
09:44: So just know that you can renumber them, but in carrot, these account numbers are
09:50: kind of irrelevant, to be honest.
09:53: Okay.
09:55: So you
09:57: can push this into Excel, which I recommend doing, and make sure that your accounts
10:04: are set up to your liking.
10:07: Also, don't forget that if you're doing a migration or
10:11: you're onboarding with your previous chart of accounts and they're bringing it into
10:15: Carrot, some accounts in Carrot are
10:19: going to be Carrot
10:20: specific. They are for Carrot functionalities and you cannot delete
10:24: them. There's no
10:25: trashcan. You also cannot edit
10:27: them. They are part of the functionality of the software.
10:31: But you may, in addition, already have, for example, an accounts receivable that was
10:37: brought over from your previous software.
10:40: So you want to make sure that when you go through and you're cleaning up your chart
10:43: of accounts, that if it's an account that carrot requires, you have to leave this.
10:49: You can leave your other account as well that's accounts receivable from the other
10:53: software.
10:54: So you would want to go to the other one and trash can it.
10:59: it out of your chart of accounts and if you need assistance with your chart of
11:03: accounts
11:04: we heavily encourage you to contact your cpa they are a great resource for helping
11:09: you establish your chart of accounts
11:12: okay
11:14: so once you have your bank accounts established and you've went through your chart
11:18: of accounts and cleaned it up to your liking from
11:22: there really we
11:25: can start doing transactions in tariff legal and
11:31: it varies where each of you will begin some of you may be migrating so you might be
11:35: bringing in data from a previous software such as maybe you brought in all of the
11:41: balances that you were due by
11:44: your previous clients and that would be considered your ar right so if you brought
11:49: in your ar then
11:52: under the invoice and payments tab here you would have
11:55: invoices numbered
11:58: here with their balance due and
12:02: we just bring them in to carrot as a one-liner so if somebody owes you 725 dollars
12:08: then you would have a one line for 725 dollars in your
12:15: invoices now there are some exceptions to that rule but that is mainly how we bring
12:20: them in so one invoice with whatever the balance is due okay
12:24: so that would be if we brought in your accounts receivable your ar what you were due
12:29: we
12:32: do not bring in
12:35: any of the other opening balances for your bank accounts we don't touch your bank
12:39: account and
12:41: we do not bring in any of the other opening balances for your different chart of
12:47: accounts account so each one of these accounts if they had money
12:51: in that account if you will in your previous software you will not see that number
12:59: and carry you have to add your opening balances so that's what i'm going to show you
13:03: next so
13:05: we do not add for your bank account or for any of your other chart of accounts any
13:10: of the opening balances again
13:12: there are some exceptions to that rule and one exception that we will see is if you
13:21: had
13:22: prepaid
13:24: in your previous software and for some of you that may seem foreign because you
13:28: don't use prepays carrot does not either carrot doesn't use prepays but some
13:32: softwares do and if your client had a prepaid on their account in carrot that would
13:38: be considered a retainer and
13:43: if that prepaid was in operating it would be an operating retainer in carrot if that
13:48: prepaid for that client was in trust and that would be a trust retainer and carrot
13:52: but whichever um prepaid account it was in and carrot those are some of the things
13:58: that we can uh bring in for you and have already designated for you which matter has
14:04: the prepaid etc and you may see that in the drop down if
14:09: a client has money in trust it's the same concept when you go to the trust account
14:15: you should see a one-liner for each matter
14:20: because it is matter specific so you should see one line with a deposit for how much
14:25: money that matter had in trust and then the next line should be the next matter how
14:31: much money they haven't trust so those are the opening balances for each one of
14:35: those trust account
14:37: balances.
14:38: So each matter that has money in trust will be listed out here with the money that
14:42: was included.
14:43: And this is just coming directly over from your previous software.
14:45: So if there are any changes to that number after
14:52: your data has been pulled from your last software,
14:56: of course, Carrot will not be aware of that and you'll need to make those
14:59: adjustments in carrot and
15:02: vice versa if you make adjustments
15:06: before the transactions are finished or it's finished migrating you might have to do
15:11: some math to make sure that your balances are correct so it's really important that
15:15: when carrot legal brings in your balances for trust that those have been vetted and
15:22: that those are accurate and match to your actual bank that
15:26: if there are any prepaids that those have been vetted and that they match with each
15:31: one of the matters balances just as you would look at their ar and say they were
15:35: they owe you money if they have money it needs to be recorded and reflected in the
15:40: accounts here
15:42: okay so
15:44: um besides the retainers and trust how do we do an opening balance for these
15:50: accounts bank accounts and the other GL accounts in Carrot Legal.
15:57: And in my demonstration, I will show you how to put a
16:01: bank account in.
16:03: So I'm going to add a bank account.
16:07: And this is going to be my Bank of America operating.
16:16: There we go.
16:19: Bank of America.
16:21: And
16:23: it is an operating based account.
16:25: You only have three options here.
16:26: So operating is the one that this is going to fall under.
16:29: And I don't want it set as my default account because I have a different operating
16:33: as my default.
16:33: But I do want it active.
16:35: So I hit save.
16:37: And if for any reason I wanted to go back and look at that account, I could hit
16:41: edit, go back and we'll talk about connecting that bank in a moment again, but
16:45: that's where I could go to look at it.
16:48: Okay, so I added my bank account.
16:53: I go to the banks and registers page and make sure
16:56: that I only have the number of accounts that I need here.
16:59: A lot of people will not check this account dropdown
17:05: they first come in here and they'll just automatically go and set up a new operating
17:08: account but carrot already gives you an operating account a trust account and an
17:13: undeposited account
17:15: from the jump so always make sure that you double check and you're not duplicating
17:20: operating accounts or trust accounts etc if you don't like the naming convention
17:24: that carrot had they just put it in there as operating or trust you can go and go to
17:30: view bank and credit card accounts edit it and rename it to whatever you want and i
17:34: highly encourage that okay so back to the opening balance we added our bank account
17:39: and now for this bank of america account it has nothing there i need to put an
17:45: opening balance for this so in my example i'm going to go staying on the banks and
17:49: registers page to the plus sign and do a new journal entry and
17:57: in my case depending on what date i migrated into carrot and what date I'm trying to
18:03: reconcile for, where I left off in my old software, where I'm beginning in carrot.
18:08: This is a really good conversation to have with your CPA.
18:13: What date should be my opening balance date?
18:17: And then I
18:20: always recommend put exactly where your opening balance for this particular account
18:25: is coming from.
18:26: So just to give an example,
18:28: opening balance pulled from trial balance if
18:33: I can spell and
18:35: QuickBooks let's just say it's that or opening balance pulled from bank account
18:41: statement
18:45: on
18:47: 0930.
18:52: So whatever it's going to be you want to sure that you reference it here okay
18:56: and make sure that it's the date that you want then
19:00: you will start by in this case i'm doing the opening balance for my bank account i
19:05: will select the boa
19:08: account that i just set up and renamed and this is exactly why i say rename them so
19:13: it's easier to identify which one you're trying to do the opening balance for
19:17: in my example i'm going to use my closing balance from September and my opening
19:24: balance from October bank
19:27: statement
19:28: to come up with my number for the debit column.
19:34: And I would just copy the reference, paste it here.
19:38: Then for the second one, I will use the opening balance equity account that Carrot
19:43: has set up for me so that I can do the offset.
19:46: And again, just paste that memo.
19:50: Just like that, I can go in and do this for every single account and
19:56: hit save and close.
19:56: I do recommend if you can break them out like this, break them out.
20:00: If you need to add line items because you don't want to break them out or you're not
20:04: in position to break them out, instead
20:07: of doing separate journal entries for each one, you can add line items.
20:13: Save and close.
20:16: and just like that for my bank option it
20:20: would put my opening balance here whereas
20:23: if I was doing an opening balance for a non-bank account account
20:29: I could go to my
20:34: reports go
20:36: to my accounting report and I have it starred here your general ledger
20:43: and I could just take a look at show
20:46: all cash base depending on which account you're
20:50: working with here so cash base and that's more for like if you're doing something
20:55: with accounts receivables where you might have to use accrual we do have some firms
20:59: that work on accrual basis majority
21:01: of the clients that I work with are cash bases but occasionally even my cash base
21:05: firms
21:06: will need to pull a cruel report so just know that that is an option here
21:11: Okay, and in this case, I want to see the opening balance for whichever account.
21:15: Let's say that I'm looking up my office supplies.
21:19: So I've selected my office supplies.
21:22: I hit generate, and now any of the transactions, which ideally it would just be one.
21:28: It would be my opening balance for office supplies, would
21:32: be in here, and I could see what that was, okay?
21:35: If you ever need to select it and look at it, you can just click on the balance and
21:38: it opens up that particular transaction for you.
21:45: Okay, so that is the opening balances.
21:48: So you'll have your opening balances,
21:51: kind of the third step in the process.
21:52: First step, go in, set up your bank accounts, make sure you rename them.
21:57: Second step would be to go to the chart of accounts and make sure everything on your
22:02: chart of accounts is tied down, that you're not missing any accounts or you need to
22:05: edit them, et cetera.
22:08: And then the third is to put those opening balances in for your different bank
22:13: accounts and the other chart of accounts accounts, your trial balance accounts.
22:18: So that would take care of those steps.
22:21: Now let's get into some of the functionality of Tarot past the setup, right?
22:27: So past setup now,
22:30: we would be doing things such as making
22:33: deposits into your bank account here,
22:38: as well as reporting withdrawals here.
22:41: So let's start with this bank account.
22:45: we started 10-1 with $10,000
22:48: and if I was just following my bank statement
22:52: to kind of help me get things recorded
22:58: I could turn around and say okay what's the very next thing that happened on 10-1 or
23:03: 10-2 or 10-3 and
23:05: if it was a deposit I would record the deposit if it was a withdrawal I would record
23:10: withdrawal out of that bank account so
23:13: let's go with we are unsure of what the first transaction is after we've recorded
23:18: our opening balance but we've linked our bank account so that we can see our daily
23:25: transactions at the bank and
23:28: what that means is that here you'll have carrot register
23:33: which shows you everything that you've entered to this bank account or whichever
23:37: account you've selected on
23:40: a daily basis.
23:42: So if you added deposits, if you added withdrawals, we would see them listed out
23:45: here with the register.
23:47: But directly beside the register is a button called download and review.
23:51: And if you linked your bank account under download and review, you could see all of
23:56: the bank transactions.
23:59: Instead of just what's in care, you could see what the bank is saying happened each
24:03: day.
24:04: And from here, you could really use this as a crutch to record everything that
24:09: happened from 10-1 through today's date, which happens to be later
24:15: on in the month.
24:17: So we would be able to go through download and review and create those transactions
24:22: or even match them up to what we have on the register already.
24:25: And that will help us get a lot further.
24:27: So that's the purpose of download and review.
24:29: It shows you the bank side in caret, just as if you were to go log into the bank and
24:35: you can either match up the transactions that the bank is showing with what you
24:40: already have on the register in caret, you know, so you can account for everything.
24:43: Or if you don't have it on the register in caret yet, it will let you create it,
24:48: okay? And there are some exceptions to the rule, but that's pretty much it.
24:54: So let's get some deposits.
24:55: Let's say that our first transaction that we see is that we had a deposit go
25:01: to this Bank of America operating account on 10-2.
25:05: Well, where are all deposits recorded in Carrot?
25:09: If you go to the Invoices and Payments tab,
25:12: this is where you can record all deposits.
25:15: Okay?
25:16: so we're talking about the operating account so if i go over to the plus sign on the
25:20: far right
25:21: i can either record a payment to an invoice so
25:25: that's apply direct payment so if somebody gave me a check for an invoice i can use
25:30: apply direct payment right here and
25:33: i can record let's
25:37: just say
25:44: Select the contact that paid me.
25:47: I don't need to pick a matter, but I can already see their invoices right here.
25:51: Perfect.
25:52: How much did they pay me? They paid me $4.
25:56: Which account was it deposited to?
26:00: And then how did they choose to pay me?
26:05: If you are doing by check, you would put the check number.
26:08: If they're paying you by credit card and it's not APX, then you could say how they
26:13: paid you.
26:14: Was it Chase Pay?
26:16: Was it Venmo?
26:18: Was it, you know, whatever it was.
26:21: However, if they are paying you via credit card through APX,
26:26: then you have to use the carrot payments option.
26:28: This is the only one that actually processes it to the bank for you.
26:32: Okay.
26:33: So if I was doing my deposit this way, payment by carrot payment, I would add their
26:39: payment method.
26:41: And this is something that you could circle back and do through the APX training.
26:49: So here you could record their card information or ACH information,
26:55: save it, and then it'll show up in the dropdown where you can then process the
26:59: payment once you hit apply and close.
27:01: Okay.
27:01: So let's go with the method that they're paying by check.
27:08: There's their check number.
27:10: And I'm actually going to put this back for 10-2.
27:13: So the transaction date needs to be updated.
27:16: There we go.
27:18: And it's going to be applied towards this invoice.
27:22: Apply and close.
27:23: Or if I have another one, apply and print.
27:26: Okay.
27:28: So this is a deposit paying on an invoice.
27:32: And there's that invoice.
27:35: Okay.
27:35: If I go to the banks and registers page,
27:40: I should be able to see under my Bank of America operating account that there was a
27:44: deposit on 10-2.
27:47: There's some information about it. $4 increasing that balance.
27:50: Okay.
27:53: If it was for trust, I go to the trust account.
27:58: I could see the same thing.
27:59: So under invoices and payments,
28:03: plus sign,
28:05: there's a whole section for trust and retainers.
28:07: It does not get put into these payments here.
28:10: Okay, so trust and retainers are on the left-hand side.
28:13: I click new trust retainer payment.
28:16: And from here, I can go ahead and say who the payer is, how,
28:24: or I'm sorry, who the payer is, is it a primary client or other? A lot of people
28:28: want to start typing in the client's name here.
28:31: And I would say that's the
28:34: biggest mistake is it's what type of payer is this? Is it coming from the client or
28:38: is it a settlement or something like that on the behalf of somebody else?
28:42: so when you're recording retainers you'll say who is making the payment or what type
28:47: and then who so
28:49: in this case I'm going to go with my client and
28:52: what matter it's for it is matter specific I
28:57: can't just say this client wants this for all of their matters and carrot every
29:02: single retainer is
29:05: specific to the matter not to the client it is specific to the matter that it
29:09: belongs to
29:10: okay what account this is being deposited to my trust if you do operating retainers
29:16: then that's why you'll see operating here and for those of you saying no we're not
29:20: allowed to do operating retainers some firms are just depends on the jurisdiction so
29:26: the to account here is your trust
29:30: in my example and i'm just going to be petty and put a dollar um the payment method
29:37: here again if they're paying you by check, credit card, water transfer, anything but
29:43: APX, you can select it and say how they paid you.
29:48: But if they're using APX and you want to process this to the bank for them, then you
29:53: need to select it.
29:55: Go ahead, add the payment method.
29:58: Once it's added and you hit save, you can then select it from the drop down and hit
30:04: create retainer.
30:06: I'm sorry, you first have put in notes for payments and deposits into trust you have
30:10: to say why they're giving them to you
30:13: initial retainer something like that or future invoice payment future work performed
30:18: whatever it is okay create
30:22: retainer actually
30:25: let me switch this back there
30:27: you go so
30:29: if i go to banks and registers again i should see a deposit under my trust account
30:38: for whichever day it came in.
30:39: Okay?
30:43: All right.
30:44: One other, or actually two other things that I'll show you here under invoice and
30:48: payments, talking about deposits,
30:50: is occasionally you may receive money to your firm's bank account that does not come
30:56: from a matter or a client.
30:59: And that is called a general deposit in CARES.
31:01: and
31:04: here you can say who it's from or
31:08: even select to
31:11: add the person or company if they're not already in your drop down and let's just
31:15: say that we have received a payment back from see if amazon is in here amazon so
31:21: amazon made a deposit to our operating account could have been for a refund
31:25: could have been for anything else they made a deposit to our bank account how much
31:29: 23 dollars
31:31: on what date this happened on 10-8 to
31:36: my Bank of America operating.
31:39: How did they pay me? I can go through
31:42: and say, instead of check, I'm going to use ACH online.
31:47: So
31:49: you can type in that they just paid you online.
31:52: In
31:53: the account, why did they give me this money? Well, I returned some office supplies
31:59: that I had originally bought through Amazon.
32:02: So I'm just going to use that as my office supplies.
32:06: Returned $23
32:09: to firm for office
32:13: supplies.
32:14: We return.
32:19: How much? Again, $23.
32:23: And there we have it, applying close.
32:26: This is a deposit to our operating account, which means that we should be able to go
32:29: to our bank from registers page to
32:33: our operating account and see this general deposit.
32:36: It has nothing to do with the matter,
32:38: but it does give me all the details that I need.
32:41: Okay.
32:41: Okay.
32:43: So the last kind of deposit I'll show you is if you have many checks that go to
32:52: the bank or even two or three checks that go the bank on a certain date.
32:56: You can record them.
32:59: Go ahead and say that so and so paid their invoice.
33:02: So apply direct payment.
33:04: Alan has some outstanding invoices and he is going to pay $100
33:09: towards his invoices.
33:12: Well, it happens to be one invoice.
33:14: But instead of it just going directly to my operating account, I'm going to put it
33:18: in this account on deposit of funds.
33:22: How did Alan pay me?
33:23: By check, and I'll put that check number in there.
33:27: The date, this all transpired on the 4th.
33:31: Okay.
33:32: So apply and new because I have another payment to enter.
33:37: And this client this time is going to be Joel and Joel, we are going to do $150.
33:48: We'll go a little higher.
33:49: We'll go a thousand.
33:50: Okay.
33:50: And
33:51: same date, the fourth,
33:54: the undeposited funds, they paid me by check.
33:56: And I go ahead and I record that in here.
33:58: Okay.
34:02: apply towards their invoice, apply a new.
34:06: All right.
34:08: Let's go for another one.
34:11: Great.
34:13: So this client, again, is going to pay me $500
34:18: to
34:21: undeposited via
34:23: check.
34:26: just recording these payments except
34:29: instead of putting them with bank of america operating i'm putting them to
34:32: undeposited and
34:34: i'll show you exactly what i'm going to do with that in a moment so i've used up
34:38: that 500 applying
34:40: close and
34:43: now if we go to banks and registers the first thing based on instinct i would go to
34:48: operating
34:49: but i didn't put them into operating i put them into undeposited
34:53: funds
34:57: here they are on 10-4 ignoring
35:00: these other payments in here I don't know who did that but
35:02: on 10-4 I recorded these payments and
35:07: these were checks that I actually took to the bank on 10-4 and
35:12: what is the bank going to do with these three checks.
35:15: They're going to say that I made a deposit of $1,600.
35:23: One deposit, $1,600.
35:26: But as you can see here in Carrot, each one of these payments is its own deposit.
35:33: And that is where we can use the undeposited funds to generate a batch deposit.
35:40: So after I go to the bank, I come back into Carrot, or after I've made the deposit
35:45: to the bank, I come back to Carrot and I say, okay, from the undeposited,
35:50: I was able to deposit to the Bank of America bank account on
35:55: 10-7,
35:58: could be 10-4.
35:59: You pick whatever date it is, whatever date it went to the bank.
36:03: And then from here, I would select exactly which payments were included with that.
36:08: And you can see these are all 10-4.
36:10: There's that 1,600 deposit amount.
36:13: So sometimes I like to put the deposit
36:16: batch
36:19: number here.
36:21: Okay, perfect.
36:23: Hit create.
36:26: and what that does is here in the undeposited account it actually removes it from
36:31: undeposited to deposited and
36:35: it will say on 10-4 there was a batch deposit that went to Bank of America for
36:39: $1,600.
36:41: So
36:42: now if I go to Bank of America and I'm thinking about my bank reconciliation on
36:48: my bank statement at the bank, it will show that I had, sorry, not that one, on
36:55: 10-4, $1,600
36:57: deposit.
36:59: Okay.
37:00: So that is how you can do kind of those batch deposits.
37:03: So everything we've talked about thus far is through the deposits here.
37:10: So next would be, what if I need to record withdrawals from CARAT?
37:16: And there are two different methods for recording money leaving your account in
37:21: Carrot.
37:22: One is right here on the Banks from Registers page.
37:27: You can use the plus sign.
37:29: And under transactions,
37:32: you can say that you spent money out of the operating,
37:36: spent money out of the trust,
37:39: or spent money on the credit card.
37:42: Okay?
37:42: So let's demonstrate that.
37:44: But if I need to record that I spent money with the operating account, I can just do
37:48: new check AP.
37:51: And here I'm going to say that out
37:55: of my Bank of America bank account, I paid Amazon for
38:02: office supplies.
38:08: There we go.
38:08: And I like to copy it just to save me some headache later on.
38:12: If you don't have the payable person in the dropdown, you can add them.
38:17: You can add a person, a company, or a vendor.
38:20: What's the difference between a company and a vendor? The vendor, you can track,
38:25: show you here,
38:27: 1099 data,
38:29: okay? So vendors, you can track 1099 data, whereas a company is not really
38:35: necessary, like Amazon or Walgreens, etc., right? But you can add them on the fly.
38:42: the next check in line for my bank of america bank account should come up here so
38:47: i'm going to go with the
38:48: next check that i have in line for 23 but once you have the starting number it just
38:54: keeps rolling to the next number in line okay the date and
39:04: now let's go back a little further now let's go towards the third so whatever we
39:08: purchased was 52 to amazon and
39:12: here i can go ahead and say that this was for office supplies right that's my gl
39:17: account that i'm selecting my expense account so maybe you have utilities maybe um
39:23: you are advancing something for the client whatever the case is this is where you're
39:27: saying what
39:30: book account to hit this is your bank account this is your book account okay so what
39:36: gl what expense account etc so here i'm spending this money on office supplies order
39:43: 52 does it belong to a matter no this is firm office supplies is it billable well
39:49: there's no matter so it's not billable and we'll get to that in just a moment so i'm
39:54: actually going to swap this out for check number to be ach because i bought this
39:58: online um some people put ach some
40:03: people put online you're just overriding that check number don't leave a check
40:06: number if it's not actually being paid with a check and
40:09: then i can hit save and close but
40:13: on my banks and registers i should see
40:15: it does call it a check but really let's look at it as a withdrawal on 10 3 52 was
40:21: spent out of our bank account deducting from that daily balance okay okay
40:26: well let's go and look at this for the credit card if
40:30: i spent money with the firm credit card new credit card entry
40:36: what credit card i'm paying from
40:38: who am i paying and this time we can do the clerk
40:45: and we'll say that we're paying for filing fees online
40:53: okay again i like to copy this memo paste it in the description down here
40:59: All right, reference number.
41:00: Do you have a credit card transaction ID?
41:06: What date did this transpire on?
41:10: How much money was this for?
41:14: okay down
41:16: here this is a filing fee for a client so i'm going to select the account
41:21: advanced client cost i'm advancing money for this matter and
41:27: which matter this
41:30: matter as soon as i type it in or select it it's automatically assuming i want to
41:34: build a client back for it okay and i do i want to build them back for the money
41:40: that i'm spending on behalf of their account.
41:42: When they pay me back, it will come into advanced client cost and it will wash out
41:46: what they owe me.
41:50: But first I have to go through like the billing process, etc.
41:52: for them.
41:53: But for right now, I just need it to be recorded to their matter and market is
41:56: billable.
41:56: That way, when I do the bill, it's included there already.
42:01: Save and close.
42:02: So I don't have to go and report a separate expense on that matter for this.
42:07: Save and close.
42:09: I've recorded that expense to my credit card here.
42:12: And if I wanted to go and check out, I'll
42:17: go to this time icon here.
42:19: If I wanted to see how that expense looked on the matter, I can go to this time
42:23: icon.
42:24: And I don't want to see the time entries or flat fees.
42:26: I want to go to the expenses here.
42:27: And the expenses will have my most recent expense on top.
42:33: And this is what I can anticipate to see.
42:35: This matter will
42:37: have an expense for filing fees, which would show up on their bill.
42:42: Yes, I intend to bill them for it, $283.
42:45: Has it been put on a bill yet, on an invoice? Nope.
42:48: When we do our invoicing, it will be there and available to add to invoicing.
42:51: Okay.
42:53: So, all
42:55: right.
42:55: Back to our banks and registers.
42:58: So showed you how to spend money with the new check AP for your operating.
43:03: Showed you how to record that you spent money with the credit card.
43:07: Last but not least, let's see how it looks if we were to write out a trust check.
43:11: Now this specifically is a trust check.
43:13: This
43:15: isn't a transfer of trust to operating.
43:17: This isn't anything like that.
43:18: This is literally a trust check.
43:20: You're writing out of one of your matters.
43:22: So your trust check, you're
43:24: going to specify which matter and I'm going with our BK account
43:31: Let's see.
43:35: Not the one I'm looking for.
43:38: Ah, that's okay.
43:38: We'll just pick one.
43:39: So here I select the matter first.
43:41: Once you tell it which trust account, select the matter.
43:44: And it will show you not only the account balance for this bank account, but more
43:48: specifically, it tells you the matter balance.
43:50: This is the most that you can write out of this matter.
43:53: Who is this payable to? Maybe to the clerk.
43:56: Who knows?
43:57: varies by each practice.
44:01: There we go.
44:03: What check number comes next in line? Number five, sure.
44:06: The date and how much?
44:08: This is a $532
44:10: fee.
44:13: And I always like to copy and paste the same description.
44:16: This is my audit trail for my trust on that matter.
44:20: So this matter shows all deposits that I've received the trust and all of the money
44:25: that's left for trust.
44:27: that's went out of that account for trust save and print we'll
44:32: actually print a check for you team
44:34: this is your check just
44:37: keep in mind that our checks are not customizable so what you see here is what you
44:41: get that means that this is a one page check and
44:45: it's a three-part page
44:48: so check on top stub that goes with it in the middle and the form copy of the stub
44:53: at the very bottom okay Okay.
44:55: You hit print and that prints right to your stock paper at your printer.
45:02: Same for operating account.
45:06: All right.
45:06: So these are the different ways that you can record that money left those bank
45:10: accounts.
45:11: But as I said earlier, there's really two ways to do that.
45:14: You can do it through the methods I just showed you or under vendors and bills.
45:19: if you run an accounts payable system where you add all your invoices into your
45:25: carrot and then later on you're going to cut checks for them further down the road,
45:29: this usually isn't you get an invoice, turn around and cut a check on the same day.
45:33: This is typically used when you need to record the
45:37: invoices that have came in and later on you're going to pay them.
45:43: So how do I record those invoices that I've received or bills that I've received as
45:47: a firm? maybe utility bills that we're going to pay at the end of the month or
45:51: whatever it is throughout the month we record all of our bills by going through the
45:55: plus sign new vendor bill
45:58: and when I go in here first thing I need to have my vendor or add them and
46:03: I'm going with Verizon and
46:06: we're going to record the
46:09: statement for
46:12: September.
46:15: What is their invoice number that they've sent me? It's on the bill.
46:19: What's the bill date, the due date? That's all on Verizon's bill.
46:23: Down here is the only portion that I really need to tell my software, right? I need
46:26: to tell Carrot what is on this bill.
46:29: And the first thing I'm going to say is phone expenses.
46:36: Phone charges for
46:38: September.
46:40: Okay, how much? $284.
46:44: Does it belong to a matter? No, it's for the firm.
46:47: Is it billable? No, this is a firm-related expense.
46:51: Can I charge back to matters here for different things like bills that I received
46:56: throughout the month to my firm? Sure.
46:58: Works the same way.
46:59: You pick a matter, you say it's billable,
47:01: and it will log it as an expense on their account,
47:04: and your bill will be waiting for you to pay it here in Carrot.
47:10: I can add line items here.
47:14: If I need to say that the next thing was for Internet,
47:18: I could do that.
47:25: And there we go, $284,
47:28: et cetera, or probably not the same amount.
47:29: Let's go.
47:31: 240.
47:31: all right now our bill is up to 524.
47:34: i'm just going to save it
47:40: and here you'll see that bill has not been paid and it's waiting for payment in here
47:45: we go on about our lives um over the next two weeks and then somebody says hey what
47:51: do we have outstanding that we need to pay we go to vendors and bills click on open
47:56: and from here i can go ahead and click the plus sign and pay the vendor bills as
48:04: well as it will select verizon it shows me any outstanding balances i'll say yes i
48:11: want to pay everything here how do i plan to pay it by operating account or credit
48:16: card if it's operating which
48:19: operating account what
48:21: check number is it what
48:26: date am i paying it pay and print prints the check or paying close i may have a lot
48:32: of other vendors to pay so i may want to stay on this page and continue to pay
48:35: vendors just paying close paying close paying close then once i have all of them
48:41: paid and actually want to cut the checks i can go to banks and registers and
48:45: batch print whichever
48:48: checks I
48:51: have.
48:54: There you go.
48:57: And if there were other ones, you could print those as well.
48:58: Okay.
49:01: Okay.
49:02: So that is how we do deposits to these bank accounts and how we do record the
49:08: different withdrawals there, okay? Vendors and bills or used banks and registers,
49:12: qualified.
49:14: Okay.
49:16: If you ever need to record payments
49:20: from trust to the operating account as you're paying your client's invoice, you'll
49:24: learn about that on the billing training.
49:26: But just know that anything that has to do with trust is going to be under invoices
49:31: and payments trust transaction.
49:33: That's how you record payments and deposits going into those retainers and trusts.
49:36: And this is how you can do transfers.
49:39: But again, you'll learn about that on that billing training.
49:43: That pretty much covers everything on banks and registers.
49:47: You may also need to transfer between two operating accounts.
49:52: That's what this is, but this is not anything
49:55: to do with, or it's nothing to do with trust.
49:59: This is just for operating to operating transfers.
50:02: And we talked about journal entries.
50:04: The last thing we'll talk about here is under report, there
50:08: are plenty of reports that will become of great use to you, but I would say go ahead
50:13: and start your chart of accounts, your general ledger,
50:17: your profit and loss, and your balance sheet.
50:19: If you're going to lean into your trial balance from your previous software and want
50:23: to match it up to CARAT when you come into CARAT, you might also want to do your
50:27: trial balance.
50:29: And then last but not least on this particular accounting reports is the account
50:32: reconciliation.
50:33: This
50:34: is where you'll go to do your monthly reconciliations for each one of your bank
50:38: accounts.
50:38: You don't need to go to the drop down, you can simply go to the plus sign,
50:43: select the bank account that you're trying to reconcile,
50:47: take the ending balance from your bank statement and the ending date from your bank
50:53: statement.
50:53: It must match your bank statement exactly.
50:56: Hit begin.
51:00: And on your account reconciliation here, you will see that the very first bank
51:04: statement, or I'm sorry, bank reconciliation that you do, there's no starting
51:08: balance.
51:09: But after this month, there will be a starting balance pulled in.
51:11: So
51:12: you want to clear off
51:14: as kind of your opening balance,
51:17: that $10,000.
51:19: And then you'll want to, or your opening journal entry right and then you'll want to
51:24: check off any deposit or any checks that have cleared
51:28: leaving anything that hasn't unclear okay and
51:33: then you should have a zero dollar difference up here on the left let me just make
51:38: my life easier okay
51:42: yeah
51:49: sure there you go so um obviously you don't want to do that but i wanted to show
51:53: that this is what you should be seeing a zero dollar difference always save as you
51:57: go and
52:00: print all transactions when you're done and just keep record of it That's
52:06: for your account reconciliation.
52:07: One more report that I want to show you and then we will call it is in your go back
52:14: out of here.
52:21: Reports,
52:22: there's under trust reports.
52:24: This one right here WIP AR Trust when you go into this report.
52:28: really does a great job of displaying
52:32: everything that
52:35: was brought over for you if you did a migration that hasn't been billed yet for
52:39: time, flat fees, soft costs, and hard, well, there shouldn't be any hard costs in
52:42: there.
52:43: CARAT doesn't bring over hard costs.
52:44: So
52:45: all of your expenses would be soft costs that were brought
52:47: over. But any unbilled time, unbilled flat fees, or soft costs would be
52:52: here. And you should just check to make sure that that's what you had previously.
52:56: The trust balances, you can just click on this column and make sure that your trust
53:00: is the right balance here.
53:02: If you do operating retainer, same concept.
53:05: Any money that is due to you can just click and just make sure that those balances
53:09: are correct.
53:10: Instead of going through each page like we were looking at earlier, this report will
53:14: show you each one of those balances before we start using CARAT.
53:17: And
53:19: yes, you can always print them.
53:21: And there are a few options for scheduling reports as well.
53:26: You can use the help menu, not
53:29: contact support, sorry, that's if you want to put in a ticket, but help center here
53:32: to get questions on different types of reports.
53:36: So WIP, AR, trust, and
53:41: just to give an example, it'll pull up and kind of give you some information.
53:44: So lean into that help menu.
53:47: I really appreciate your time today, and I hope This was a great learning session
53:51: for you, and I look forward to having you on other trainings in the future.
53:56: Have a great day.
54:01: Learn to configure bank accounts, enter opening balances, record deposits and withdrawals,
54:05: manage vendor bills, and utilize accounting reports in CARAT Legal for efficient
54:10: financial management.
If you would like additional assistance you can schedule a Q&A call with one of our training specialist here.
If you would like to continue training, we would recommend completing the Billing or Document Automation webinars next.