Navigating IOLTA Trust Accounts
Here are the updated versions without em dashes: Spotify Description Trust accounting is one of the most compliance-heavy areas in legal bookkeeping, and post-tax season is exactly the right time to audit where things stand. In this episode, Lynda and Steve dig into the common traps law firms fall into with their IOLTA and trust accounts: timing issues with Clio Pay and e-checks, commingling funds (intentional or not), the danger of moving money before it clears, and why switching bank accounts doesn't fix underlying reconciliation problems.
They cover the three-way reconciliation that every firm should be doing (bank, billing software, accounting system), how to structure your chart of accounts with proper sub-accounts and a trust suspense account, and what to expect and do if the bar's attorney regulation counsel comes knocking for an audit.
Whether you're new to legal accounting or doing a post-tax-season cleanup, this episode is packed with practical guidance on protecting both your clients and your license.
Topics covered: IOLTA trust accounting, Clio Pay timing, three-way reconciliation, chart of accounts setup, QuickBooks Online, bar compliance, trust audits, personal injury disbursements, and more.
00:53 Trust Accounting Reset
01:28 Tax Return Reporting
02:27 One File vs Two
03:46 Bar Rules First
05:15 Clio Pay Timing Risks
07:31 PI Checks and Disbursements
11:21 Client Loans and Compliance
13:14 Choosing Legal Software
15:20 Clio vs LeanLaw Workflows
16:09 Spotting Date Errors
16:35 Retainers and Payments
17:30 Three Way Reconciliation
17:59 Account Bucketing Setup
19:06 QuickBooks Lock Feature
20:41 Trust Suspense Accounts
21:53 Reconciliation Misconceptions
22:59 Avoiding Commingling
24:43 Handling Trust Audits
25:53 Cleanup and Opening Balances
28:06 Outsourced Help and Notes
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Disclaimer: The content presented in this podcast is for informational purposes only and should not be considered as legal, financial, or professional advice.