A client trust account is a checking account set up to hold money that a
client or clients have given you in advance of performing work on their
Create a QuickBooks "bank" account called Client Trust Accounts.
Go to the Company menu and click Chart of Accounts.
Click Account at the bottom of the list and click New.
Click the Type drop-down list and choose Bank.
In the Name field, enter Client Trust Account or Client
Trust Accounts, depending on whether you have one or more actual
bank accounts for client trusts.
Click Save & Close.
If you have more than one bank account for trusts, create subaccounts for
each one under Client Trust Accounts.
In this case, Client Trust Accounts will be the "parent" account
in QuickBooks for the actual trust accounts. This lets you see all your
bank trust accounts together under one parent account on a QuickBooks balance
Don't do this step if you have only one actual bank account for client
In the Name field, enter the name of the client or case.
Select the Subaccount of checkbox. Click the Subaccount of drop-down
list and choose Client Trust Accounts.
Create a QuickBooks "other current liability" account for the
client monies you're holding in trust.
You can have just one liability account for trust monies, even if you've
opened several bank accounts for trust monies. QuickBooks can separate what
you owe to each client and each client's fees and costs.
This liability account represents money you owe to your clients. The balance
of the liability account should be the same as the total amount you have
in your bank trust accounts, minus any of your own money you may have had
to deposit as a minimum balance (see next step).
Click the Type drop-down list and choose Other Current Liability.
In the Name field, enter Funds Held in Trust.
If you had to deposit your own funds to maintain a minimum balance in the
trust bank account, write a check to the bank from your own checking account:
Go to the Banking menu and click Write Checks.
Click the Bank Account drop-down list and choose your operating checking
Click the Pay to the Order of drop-down arrow and choose the name of
your trust account.
On the Expenses tab, select the trust account in the Account column.
In the Amount column, enter the amount of the check.
Send the check to the bank or physically deposit it. However, don't
include it in the QuickBooks Make Deposit window, as you've already
transferred the money to the client trust bank account when you wrote the
check in QuickBooks.
Handling trust accounts