Chapter 3. Trust cards HandiTrust 2015
Things that can confuse
Difficulties that people have using HandiTrust 2015 generally stem from their lack of understanding of trust cards. This section addresses the particular items that can cause confusion.
Bank balance equals total of all trust cards
The bank account balance equals the value of all trust cards for that bank account
For example, imagine that ABC Accounting's bank account has a balance of $1540. The total of all client and firm cards is equal to the balance of the bank account. This is displayed in the following table.
Trust Bank Account of ABC Accounting
Debit Credit
Client Trust Cards
A & A Wholesale 500
Mr Dave Adams
Antonio’s Restaurant
Ms Edna Crabb
Firm Trust Cards
ABC Accounting Pty Ltd
0
480
410
0
150
1540
Debit (negative) trust cards
You may have your Ruling Body Options configured so that HandiTrust 2015 does not allow trust cards to go into debit (negative). Confusion can occur during data entry when transactions are accidentally recorded against the wrong trust card.
Brief example
Imagine the situation where a single client has two trust cards:
Trust Card 1 – balance of $1,000
Trust Card 2 – balance of $0
Even though the client has total funds of $1,000, HandiTrust 2015 would not permit you to withdraw funds from Trust Card 2. Withdrawing funds from Trust Card 2 would put the trust card into debit.
Detailed example
Imagine that you have a client, who is serviced by your firm (ABC Accounting), using bank account (123). You have created two activities: TAX and OTHER.
The client has requested that you pay an expected ATO fine on his behalf . He has given you a cheque for $1450 to cover the fine. You record the deposit of $1450 in HandiTrust 2015 against the OTHER activity. This is illustrated below:
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HandiTrust 2015 Things that can confuse
The balance of the client's OTHER trust card after the receipt was entered was $1450.
Stan has two trust cards:
Trust Card
(bank ac / firm / activity)
123 / ABC / TAX
123 / ABC / OTHER
Balance
$0.00
$1450
Ten days after you deposited the client's cheque, you receive an invoice from the ATO for the clients's $1440 fine. You must record a Client Payment to withdraw funds from the client's trust card and pay the ATO. If you record the Client Payment against TAX activity instead of the
OTHER activity, you will not be able to save the transaction. You would receive the error:
"Your Ruling Body won't allow debit balances to trust cards".
The error occurs because the Body Rules do not allow negative trust card balances.
Remember: the client has $1449 in the trust account. However, the money is on the client's
OTHER trust card.
The data entry error is clearly visible on the "Client Payment" window.
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