What information is required on trust account deposit slips?
When you receive trust fund, the Law Society's By-Law 9 requires you to deposit the fund in your trust account no later than the next banking day. You should also make sure to record the information required by By-Law 9 on your deposit slips.
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Four different types of trust bank accounts used in a law office
If you receive or disburse client trust funds, you will need to open a trust bank account. There are four different types of trust bank accounts:
Read more: Four different types of trust bank accounts used in a law office
Open or close a mixed trust account - Legal bookkeeping
Most law firms need a least a mixed trust account - a bank account to hold money for more than one clients. You need to be aware of the Law Society's rules regarding opening and closing a mixed trust account.
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What is a general monetary retainer? - law firm bookkeeping
A general monetary retainer is an amount paid to a lawyer by a client to secure the availability for a specific period time. Unlike a specific retainer, general monetary retainer cannot be allocated to any legal services that are rendered or will be rendered.
Read more: What is a general monetary retainer? - law firm bookkeeping
List of documents we need for bookkeeping
Generally, we need the following documents for bookkeeping purpose:
- Trust accounts bank statements with cancelled cheques.
- General accounts bank statements with cancelled cheques.
- Invoices to clients.
Why bookkeeping is important to your law practice?
There are several reasons to keep books and records properly in your law practice.
To protect your important asset - your license
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Books and records of law firms
According to the requirements of the Law Society, you must keep the following records for at least ten full fiscal years:
- Trust receipts journal
- Trust disbursements journal
- Client trust ledger
- Monthly trust comparisons, including supporting trust bank reconciliations and client trust lists
- Valuable property record
- Bank statements or pass books, cashed cheques, and detailed duplicate deposit slips for all trust and general accounts
- Signed electronic trust transfer requisitions and signed printed confirmations of electronic transfers of trust funds
What money goes to which bank account? trust account or general account?
Most law firms have two bank accounts: general account and mixed trust account. The Law Society has guidelines regarding what money goes into trust account and what money goes into general account. It is important to understand the rules.
Read more: What money goes to which bank account? trust account or general account?
Choosing a bookkeeper for law firm
An important decision every lawyer faces in setting up their practice is how to ensure their books and records are maintained in accordance with the requirements of the Law Society.
There is a prevalent notion among lawyers that the bookkeeper’s role is akin to that of a data entry person. Some lawyers may hire a relative for this job or delegate it to a secretary without careful deliberation of their qualifications. Poor books and records lead to costly administrative suspension by the Law Society.