The practice of law takes time, but never more than the time required to manage the finances of your business at hand. Although few of us are thinking of going back to the era of typewriters and carbon paper, a surprising number of people are trying to manage the bank account and the client trust account of their law firm with a pencil and paper. Earlier, law firms were painstakingly monitoring customer trust money by using buff register cards on which they hoped to get enough detail to accurately hold these accounts. Technology makes it an interesting historical remnant of the management of the practice of law, but you must make the technology work. So here is a trust accounting which will help you in solving bigger problems.
Firstly let’s get to know what Trust accounting is
Trust accounting is simply trustee accounting or bookkeeping of trust accounts in accordance with the requirements of the state, but they have a few rules in common. In particular, there should be no mix of client funds with legal or law firm funds, and accurate record keeping is essential. Trust accounting has very specific document retention requirements, which are used to maintain accurate information for both the agent and the client. Trust accounting includes:
- Track all deposits and disbursements made through the account.
- A large, detailed book that notes each monetary transaction for each particular client.
- An account log for each account, followed by each transaction via the account.
- Monthly reconciliation of the account.
Trust accounting software manages receipts, payments, logs, reconciliation, automated letters, customer declarations, spread earned interest, collect fees automatically, and generate reports required by your compliance. It would take days to perform these tasks manually. Trust accounting software is easy to use, incredibly flexible. It reduces time, efforts and aggravation in processing trust accounts. Trusted Accounting Software helps you ensure that you comply with all the rules of ethics and law governing trust accounts in your state. This will increase your accountability and also this software will allow keeping track of multiple accounts so you do not run the risk of accidentally confusing client funds with your own accounts.