Trust Accounting Software Saves The Day

By Author: Mayank Kapur
Total Articles: 278
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It's scary. The annual number of disciplinary actions - even disbarments - that arise out of client trust fund mismanagement.
Some are the result of careless mistakes - brought from bad escrow management practices . Few encapsulate actual intent. But then come the random auditors—and suddenly, you're in trouble.
Don't let it happen to you.
Using the below primer on trust accounting, you can put a few practical tips into practice immediately. We'll have you in compliance and prepared ­for a knock on the door from your state auditors.
First, which of the following funds belong in client trust accounts?
A) Real estate transaction funds, such as a down payment on a house
B) Personal injury settlements
C) Earned fees
D) Personal funds
E) Operating funds
F) Collections
G) Other settlements or judgments
H) Retainers and advances
The answer is A, B, F, G, and maybe H—depending on whether you've earned the advances or not.
If you knew the answers, ...
... the tougher question is, how do you put it into action?
You've got to a) keep all of your client's funds in separate accounts, b) make sure your client ledger doesn't have a negative balance (or you're in the red), and c) make sure everything's in the right account (trust v. operating) at all times. Then, at the end of the day, you've got to d) reconcile it all.
How do you know what to keep, and what you can toss? Often, trust account bookkeeping requires you to keep paper records of check stubs and expense receipts.
With Easy Soft's Easy Trust software, it is easy. The software guides you through each requirement, reconciling balances—even performing three-way reconciliations.

Don't lose sleep over trust fund accounting. Follow the above rules, and you'll always be prepared for an audit.

Author Bio

Easy Soft specializes in helping law firms automate their processes with law office software. Easy Soft has automated software solutions for virtually every practice area, from case management, document assembly and time & billing, to debt collection, amortization and escrow software.