Earmarking client money

An earmark sets client money held on a matter aside for a stated purpose: stamp duty, completion monies, a court deposit, registry and valuation fees, a settlement sum, or anything else you name. Once earmarked, the money can only leave the client account in the payment it is for. Above all, it can never be used to settle the firm's own bill.

What a matter's client money reads

A matter's Client account, Ledger shows four figures in each currency:

• Held: everything held for the client on the matter.
• Uncleared: money from cheques that have not cleared yet.
• Earmarked: money set aside for a stated purpose.
• Free: what may be paid out or earmarked today, which is the cleared money less what is earmarked.

Every payment out of client money (a refund, a disbursement paid from client money, a transfer to office, a transfer to another matter) is checked against free money when it is asked for, when it is approved and when it is paid. A request that would reach into earmarked money is refused and names the earmarks in the way.

Earmarking money

1. Open Client account, Earmarks, or a matter's Client account, Earmarks, and choose Earmark money.
2. Choose the matter and the currency. The form shows how much is free to earmark.
3. Give the amount and say what it is for. For Other, say it in words.
4. Add the day it is expected to be used, who is to be paid (such as the Lands Commission or the Ghana Revenue Authority) and a note, where known.
5. Choose Earmark. The earmark is numbered, for example EAR-2026-00001.

Only free money can be earmarked. Raising an earmark later also takes free money.

A funds request can earmark what the client pays against it: choose Earmark when paid on the request. Each receipt matched to it sets that amount aside for the purpose as it lands.

Using it in a payment

Open the earmark and choose Use in a payment, or choose the earmark under Uses the earmark on a refund, or on a disbursement paid from client money. The payment uses as much of the earmark as it pays, and the rest stays earmarked. The payment still goes through the usual approval and signing.

If the payment is later reversed, the earmark is restored.

Changing or releasing it

• Change moves the expected day, the payee or the note, or raises the amount out of free money.
• Lowering an earmark, or Release, returns money to free. Releasing needs the right to release earmarks (partners by default) and a reason, which the record keeps. A release can be in part.

Every change is listed on the earmark with who made it, when, and why.

When something goes wrong

• An earmark past its expected day is marked Overdue, and whoever raised it and the matter's responsible partner are told once. Nothing is released by itself.
• If a returned cheque leaves the earmarks above what the matter holds, the ledger is flagged and the responsible partner and the client account partner are told at once. Nothing is released or used by guess: the partner decides which earmark to lower or release.
• A matter cannot close while it holds an open earmark. The closure checklist names each one.

Seeing every earmark

Client account, Earmarks lists every open earmark across the matters you can see, with what it is for, its expected day and what it still holds. Filter by standing, purpose, or whether it is past its day.

Reports, Earmarked funds shows what was earmarked as at any day, by matter, client, lawyer, office or currency, with a column for each purpose and totals by currency. Each figure opens the earmarks behind it.