These systems can flag unusual transactions, low balances, or potential compliance issues immediately. Dual approval systems for trust account transactions add an extra layer of protection against mistakes. Having two people review significant transactions reduces the risk of errors. The sum of all individual client balances should equal your internal trust ledger balance, which should match the bank statement balance. If these don’t align, investigate to find the source of the discrepancy.

• The law firm can’t pay bills directly out of the client trust account.
• These funds sit in dedicated trust accounts — completely separate from operating accounts — until earned or disbursed according to client instructions or legal requirements.
• Any interest earned on the account is remitted to the state bar association, which uses the funds to support legal aid programs and other public service initiatives.
• Get assistance matching your trust account records with bank statements and identifying discrepancies.
• Join a professional team, ensure accuracy, compliance & timely payroll.

Beyond Documents: Integrated Legal Billing and Trust Accounting

We are so excited for the next evolution of the legal accounting platform you know and love. Please note that apart from Training Hub and Sign In, all other menu links will redirect to relevant Actionstep website pages. Start using Soluno by December 1st, 2023 and save 25% on your law firm’s first year. Clients can access invoices, payment history, and documents in one place, reducing back-and-forth and improving communication across the board. TimeSolv keeps every team member aligned and every deliverable on track; no micromanaging required.

What happens if trust account reconciliation doesn’t balance?

Staff training must emphasize the prohibition against commingling and the consequences of violations. Banks sometimes make errors or apply fees without adequate notice. Quick communication can resolve these issues before they become larger problems. Each deposit and withdrawal should appear correctly in all three records. Look for missing transactions, incorrect amounts, or misallocated funds that could explain any discrepancies.

Why Your Law Firm Can’t Afford to Ignore Trust Account Compliance

• Automated systems can flag unusual transactions or discrepancies immediately, allowing quick resolution.
• Incorporate industry-leading trust account management techniques into your processes.
• Our bookkeepers help law firms and businesses maintain accurate trust records through accounting services specifically made for legal practice.
• Standard SharePoint search is limited without complex configuration.
• PageLightPrime is not a replacement for SharePoint—it is a native legal intelligence layer built directly on top of Microsoft 365.

Trust accounts must be managed with precision and in compliance with strict ethical and legal regulations. Proper trust accounting ensures that client funds are safeguarded and used only for the intended purposes. Managing client funds is one of the most critical responsibilities a law firm faces.

• When regulations change, the system notifies users and adjusts compliance checking accordingly.
• As a lawyer, you hold a special position of trust when it comes to managing client funds.
• They don’t mention trust accounts in the first conversation If they’re not immediately focused on IOLTA compliance, they don’t understand law firm work.
• Trusted by law firms for secure, dependable, and comprehensive legal practice management.
• Learn more about how we can support your firm’s trust accounting compliance by visiting CoCountant.

Trust accounting is a meticulous process that can be challenging to do. Below are a few more tips your law firm can consider to help improve your trust accounting system. We highly recommend electronically managing all trust fund accounting to avoid the mistakes of hand-written records. MyCase’s legal accounting software can help you efficiently and easily monitor client and admin ledgers under a single platform.

Best practices for legal bookkeeping every law firm needs to know

These aren’t suggestions—they’re fundamental requirements that protect both clients and your firm. Consistent monthly reconciliation is the foundation of trust accounting compliance. Firms that treat reconciliation as optional or «when we get to it» face exponentially higher violation risk. law firm bookkeeping The interest earned goes to fund civil legal services for low-income individuals. The moment your firm receives any of these funds, they must enter the trust account.

These funds cannot be used until earned, billed, or otherwise authorized by the client. Attorneys rely on attorney timekeeping software that allows them to capture time accurately, even across multiple matters and clients. Billable hours must be tracked in a way that aligns with firm billing practices and client guidelines.