Separating client trust funds from law firm operating funds is a necessary practice. When it comes to running a small firm, this concept appears to be among the most feared by lawyers.
As an attorney, you will probably hear horror stories about that one time an attorney made a mistake and lost their license.
Trust accounting is simply the process of keeping records. Maintain an account for money that isn't your own so that you aren't tempted to spend it. Fees that are unearned (normally paid as a retainer), settlement funds, or advance costs and court fees are all included.
But we all know they're not that simple for every lawyer. Don't worry! With this article, we will take you through the basics of everything you need to know about trust accounting for law firms. This includes trust accounts, key features of trust accounts, what you should/shouldn't place in a trust account in a visual way.
As you can see, there are many issues that you need to pay attention to with trust accounts. I hope you will get an overview of trust accounts with our accounting infographic.
A lawyer may find it difficult and overwhelming to manage trust accounts. To support you with trust accounts, it is highly recommended to have an outsourced accounting firm support you. Mistakes will bring serious ramifications, so make sure your accounting firm is trustworthy and reliable. Check with an outsourced service to see if they have experience with trust accounting before choosing them to handle your trust accounting needs. There are several differences between trust accounting and regular bookkeeping. Keep looking for a qualified individual if the accountants/bookkeepers in question do not have experience with trust accounts, law bookkeeping issues.
Irvine Bookkeeping offers a full range of bookkeeping services specialize in the law firm industry. We believe knowing your company's financial health is the key to maintaining control of your business. Find out more by contacting us today! Call Irvine Bookkeeping now for a Free Quote!
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