NSW Trust Account Management

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Trust account management is an essential component of working with trust funds. If your firm is based in New South Wales (NSW), Australia, and you are required to be NSW compliant, you can follow the directions in this article. This article covers how to record money paid into and out of firm trust accounts, create and maintain trust accounts in Clio, create trust payments and receipts, manage trust reconciliations, generate trust reports, and more.

Note: These trust account management features are certified by the NSW Law Society.

Enable NSW compliance trust account compliance

Before getting started with NSW trust account management in Clio Manage, you need to enable the compliance feature in your Clio Manage account. Only administrators can enable this feature. Once enabled, any firm user can use the components of the feature. 

Important: Once this feature is enabled, you will need to close any existing trust accounts that were created before the feature was enabled and create a new compliance trust account. Additionally, you cannot disable the feature on your own once it is enabled. If you need to disable it, you will need to contact Clio's support team.

Step 1: Verify that your mailing address in Clio Manage is set to Australia

  1. Go to Settings > Accounts and Payment Info.
  2. Select the Account Info tab.
  3. Scroll down to Mailing Address.
  4. Under Country, select Australia. 


Step 2: Enable NSW compliance trust account compliance

  1. Go to Settings > Firm Preferences.
  2. Select the Compliance tab.
  3. Check the box for NSW trust account compliance. 


Create trust accounts

Once you have enabled NSW trust account compliance for your Clio Manage account, you will need to create a new trust account or multiple trust accounts, depending on your firm. Within the new trust account(s), you will be able to view account details, transactions, receipts, and reconciliations. 

  1. Go to Accounts and then select New account.
  2. Under Account type, select Trust Account.
  3. Under Trust account type, select either General Trust or Controlled Money.
    • If the trust account is for multiple matters or for the NSW Legal Society statutory deposit, select General Trust.
    • If the trust account is for just one matter, select Controlled Money.
  4. Under Account status, select Open.
  5. Complete the remaining fields as required.
  6. Click Create New Bank Account.


Create, view, and download trust receipts

When you receive funds from a client for a specific matter, you can create a trust receipt to record the funds. Once created, each transaction will have its own automatic receipt number under the Transactions column of the receipts table. You can also view and download any of your recorded trust receipts.

Create trust receipt View and download
  1. Go to Accounts.
  2. Select the trust account where the funds will be allocated.
  3. Select New receipt
  4. Complete the required fields.
    Important: If you select Cash or Cheque under Payment Type, you are required to also create a trust deposit record. Learn more about creating trust deposit records below.
  5. Click Record transaction


Create, view, and download trust deposits

When you record a cash or cheque receipt, you are also required to create a deposit record. You can then show this record to your banking institution to deposit the funds.

Create trust deposit View and download
  1. Go to Accounts.
  2. Select the trust account where the funds will be allocated.
  3. Select Deposit funds
  4. From the list of undeposited transactions, select the transactions that you want to deposit.
  5. Enter the Deposit reference and select the Bank account and Deposit date.
  6. If you are depositing any cash deposits, enter the dollar values under Coins and Notes for the amount of cash coins and cash bills.
  7. Under Transactions, select the cash and/or cheque deposits that you want to deposit.
  8. Click Save deposit.


Record NSW Legal Society statutory deposit

Under s46 of the Legal Profession Uniform Law Application Act 2014 and s9 of the Legal Profession Uniform Law Application Regulation 2015, NSW law firms are required to deposit a prescribed amount, out of the money that is held in a general trust account, into an ADI account maintained by the NSW Law Society. Your firm is required to make deposits into the statutory deposit account by March 31, June 30, September 30, and December 31 of each year.

Step 1: Calculate the amount to be deposited

  1. Go to the NSW Statutory Deposit Calculator on the NSW Law Society's website.
  2. Calculate the amount that needs to be deposited into the statutory deposit account.
  3. Pay the amount owing into the NSW Law Society's ADI account.


Step 2: Record the payment in Clio Manage

  1. Confirm that the NSW rules are turned on for your account
  2. Create a new company contact for The Law Society of New South Wales. Learn more about creating contacts here.
  3. Create a new matter for the contact. Learn more about creating matters here.
    • Under Matter description, enter Statutory Trust Deposit.
    • Under Practice area, select Statutory Trust.
  4. If you do not already have a trust funds bank account in your Clio account, create a new one. Learn more about creating trust funds accounts here.
  5. Record a new payment from the general trust account into the matter. Learn more about recording trust funds transactions here.
    • Under Amount, enter the amount that you paid to The Law Society of New South Wales.
    • Under Client, select The Law Society of New South Wales.
    • Under Matter, select the matter for The Law Society of New South Wales.
    • Under Source/Recipient, enter The Law Society of New South Wales.
    • Under Description, enter Statutory Deposit.


Record and view trust payments

You can use funds from a trust account to pay bills and third-party expenses. You can pay third-party bills from trust by either recording a trust payment directly to the third party or by recording the expense on a bill and apply trust funds to the generated bill. When a transaction is recorded, you can view it in the trust account. Each transaction will have its own automatic receipt number under the Transactions column of the receipts table. 

Record trust payments Apply trust funds to bills View transactions
  1. Go to Accounts.
  2. Select the trust account that you will make the payment from.
  3. Click New payment.
  4. Complete the required fields for the recipient.
  5. Complete the required fields for the client and matter that the funds will be withdrawn from.
    • When you select a matter, you can view the matter's trust balance. If the account does not have sufficient funds, you will see a warning that the account will be overdrawn. If you proceed with the payment, the client's account will go into an overdrawn state. You can report on overdrawn accounts using the trust overdrawn report. Learn more about this report here.
  6. Click Record transaction.


Void cheque payments

In order to comply with NSW trust account compliance rules, you are required to record all cheques. If a cheque is damaged and you need to void it, you can record a transaction of the voided cheque. 

  1. Go to Accounts and select the appropriate trust account.
  2. Click New payment.
  3. Under Payment type, select Cheque and add the reference number for the damaged cheque.
  4. Select the box next to Void Cheque.
  5. Under Reason, enter the reason why you are voiding the cheque.
  6. Click Record transaction.


Transfer trust funds between matters

If you need to move funds between matters or bank accounts, you can record a transfer transaction. One example why you may need to do this is if a client has multiple matters with your firm and requests funds to be moved between their matters. Once the transfer is recorded, there will be two transactions in the trust account—one will show a debit (funds out) and the other will show a credit (funds in). Both transactions will have the same journal reference number. 

Note: If you have multiple trust accounts, funds can only be transferred between matters that are associated with the same trust account. 

Tip: You can view all funds that have been transferred by generating the trust journal report. Learn more about NSW trust account management reports here.

  1. Go to Accounts and select the appropriate trust account.
  2. Click Transfer funds.
  3. Select Between matters.
  4. Under Client, select the client for this transfer.
  5. Under Source, select the matter that funds will be taken from.
  6. Under Destination, select the matter that will receive the funds.
  7. Under Amount, enter the dollar amount of the transfer.
  8. Under Authorised by (Person 1), select the firm user who will approve the transfer.
  9. Complete any remaining details and then click Record transfer


Cancel transactions

If you record a trust transaction incorrectly, you cannot edit the transaction. You can correct an error on a recorded trust transaction by cancelling the incorrect transaction and creating a new trust transaction. Once cancelled, you will see a new transaction with the same receipt number as the original transaction. This transaction will show as a debit (funds out) and have a description that specifies it is a reversal of the original transaction.

Important: Cancelling trust transactions is a permanent action. You cannot undo or recover the cancelled transaction. 

Cancel trust transaction Send client cancelled transaction receipt
  1. Go to Accounts and select the appropriate trust account.
  2. Under Transactions, find the transaction that you want to cancel.
  3. Click the down arrow next to Edit and select Delete.
  4. Select the date.
  5. Click Delete.


Perform trust account reconciliation

Trust account reconciliation compares trust transactions in Clio Manage with transactions from your bank during a given month. You are required to perform reconciliations monthly within a few days after the end of the month. 

Step 1: Record trust transactions, receipts, and deposits in Clio

Before beginning a reconciliation, you need to record all trust transactions and trust receipts, and create bank deposits, for the reconciliation period in Clio Manage. Learn more about trust funds reconciliation in Clio Manage here.


Step 2: Create reconciliation adjustments

If you have discrepancies in a trust account, you can add adjustments to calculate the adjusted balance. You can either deduct funds or add new funds into the trust account. 

  1. Go to Accounts and select the appropriate trust account.
  2. Click Add adjustment.
  3. Complete the required fields.
  4. Click Add. 


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