Tracking funds in escrow

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Monchilla makes it easy to track funds in escrow from the time the client gives you the money until the deal is closed.

Expand Chart of Accounts

  1. Click the Accounting tab.


  2. On the Accounts page, select Assets and click the New Account button.


  3. In the Account Name field, enter Escrow Assets. In the Opening Balance field, enter 0.00. Click Save.


  4. Scroll down the list of accounts and select Liability.


  5. Scroll back up to the top and click the New Account button.


  6. In the Account Name field, enter Escrow Liability. In the Opening Balance field, enter 0.00. Click Save.


  7. If you want to track the retainer balance for each client seperately, create a new account in the same manner as above. In the account list, select Escrow Liability, then click the New Account button. In the Account Name field, enter the name of the client. 

    Note: If you are tracking the balance of the client's escrow account elsewhere, skip this step as it is more detail than is required.

Record Escrow Paid

When your client gives you money to hold in escrow:

  1. Click the Income tab.


  2. On the Income page, click the green Income button.


  3. In the Income window, enter the following information in the fields, then click Save.
    Note: Next to the Account field name, click the Expand link to show From Account and To Account fields.
  • Amount: amount of the retainer paid
  • Date: The date the retainer was provided by the client
  • From AccountEscrow Liability (or the client-specific retainer account)
  • To AccountEscrow Asset

Record Income when the Deal Closes

When the deal closes you can, create an invoice, but use the Escrow Liablity account you created as the To: account. This will decrease the escrow liability account balance (liability accounts, like credit cards get a smaller balance when paid).

Transfer Funds from the Escrow Asset account to the Brokerage

Once you have earned the funds held in escrow you should transfer the funds from the Escrow Asset account to your business checking account. To record the transfer in your books:

  1. Click the Income tab.


  2. On the Income page, click the green Income button.


  3. In the Income window, enter the following information in the fields, then click Save.
    Note: Next to the Account field name, click the Expand link to show From Account and To Account fiel
    ds.
  • Amount: The amount of the invoice you created in the previous section
  • Date: The date you will transfer the funds
  • From AccountEscrow Asset
  • To AccountPrimary Checking Account

Nice job! You've successfully tracked escrow paid by clients.

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