| Trust account rules vary from state to state, but | | | | stopped at the transaction entry itself. |
| one constant for attorneys or anyone working in | | | | • Are required monthly reports such as ledger |
| a fiduciary capacity is the over-riding fear of | | | | card balances, transactions, reconciliation and |
| running afoul of strict requirements. Take the | | | | three-way reconciliation, etc. easily produced? |
| following steps and you won’t lose sleep | | | | • Is there an option to print trust checks and |
| worrying about your responsibility to comply with | | | | or deposit slips? |
| complicated trust account regulations. | | | | 3. Avoid Commingled Bank Trust Accounts |
| 1. Migrate from Manual to Automated Record | | | | A client trust bank account is a special kind of |
| Keeping | | | | account. Today, many banks offer a particular |
| Review your firm’s trust bookkeeping | | | | type of trust account with separate sub-accounts |
| procedures and identify which procedures are | | | | for each client. |
| managed manually. Often, law firms enter each | | | | A bank account that allows you to manage |
| client’s transactions separately and issue trust | | | | individual client funds separately provides a double |
| checks manually. Manual bookkeeping is the root | | | | layer of protection for your firm because a bank |
| of several problem areas. Not only are manual | | | | can also alert you to any client ledger overdraft |
| processes time-consuming, but also mistakes are | | | | situation. Additionally, you will receive monthly |
| difficult to detect and reports are next to | | | | client ledger trial balances from the bank, which |
| impossible to prepare. | | | | you can then match with your office client ledger |
| A good trust accounting software program can | | | | records. |
| easily replace ALL your manual bookkeeping tasks | | | | 4. Archive Closed Client Accounts |
| and provide you with total control of your trust | | | | When a client matter has been completed, the |
| accounting. You will: | | | | balance on the client's ledger is zero, and all |
| • Simplify transaction entries, trust check | | | | transactions have been reconciled with the bank |
| printing, bank reconciliations, and generating | | | | statement, you should "close" or archive that |
| reports | | | | client ledger. Otherwise, over a period of time, |
| • Readily detect errors | | | | you will be dealing with hundreds or even |
| • Maintain an audit trail for any changes made | | | | thousands of "open" client ledgers. |
| in your trust books | | | | 5. Protect Your Trust Software Data File |
| • Make it easy for your accountant to review | | | | While a computer or software can be replaced, |
| your trust data and make appropriate corrections | | | | lost data is not easy to re-create. For trust |
| without shuffling through stacks of paper | | | | accounts, always maintain a hard copy of each |
| 2. Choose Your Trust Accounting Program Wisely | | | | client ledger on a monthly basis. Make regular |
| Don’t rush to embrace the first accounting | | | | backup copies of your trust database files and |
| program you find to manage your trust books. | | | | store them at a remote location. |
| Many accounting packages that work very well | | | | Automate Today and Put a Stop to Trust Fund |
| for general operating accounts often lack features | | | | Account Worries |
| that trust accounting requires. For example, | | | | Managing trust accounts is easier than you think. |
| general accounting packages typically do not | | | | Start with a careful review of your firm’s |
| produce client ledgers easily and do not prevent | | | | trust accounting processes. Begin using trust |
| trust accounting mistakes from occurring. There is | | | | account software designed to help you comply |
| typically no audit trail log and one can even go | | | | with state regulations. Remember, a client A's |
| back to reconciled months and edit prior | | | | money has nothing to do with client B’s |
| transactions. That's not proper trust accounting! | | | | money. Your trust books should only contain open |
| When you evaluate your trust program choices, | | | | accounts. And, make an iron clad rule to backup |
| consider the following questions: | | | | copies of data files and store them in a secure |
| • Does the program make deposits and | | | | and separate place. Follow these tips and you will |
| disbursements in each client account very easy to | | | | bring order to your trust bookkeeping, tighten |
| enter, track and reconcile? | | | | controls and no longer worry whether or not you |
| • Is the program designed to prevent | | | | are in full compliance with state regulations. |
| common trust accounting errors, such as duplicate | | | | Also check out details for hud software, |
| check numbers, client ledger overdrafts etc.? | | | | comprehensive and fully automated real estate |
| These are examples of problems that must be | | | | closing software. |