By: vish ks
Submitted: 2010-02-21 22:21:25 | Word Count: 546
Trust accounting rules vary, but one aspect remains constant for attorneys or any person working in a fiduciary power. It is the dominant fear of not falling in line with the strict requirements. Adhere to the following steps and you will not have to worry about your need and responsibility to comply with some of the complicated trust account regulations anywhere in the world. It would be wise to migrate from manual record keeping to automated record keeping.
Review your private firm's trust bookkeeping procedures thoroughly and identify which all procedures are evaluated and managed manually. Time and again, law firms enter each of their client's transactions separately and issue trust cheques manually. Manual bookkeeping is the main cause of several problems. In addition to the fact that manual processes is a time-consuming one, the mistakes made are difficult to detect and the various reports needed to be produced are almost impossible to be prepared.
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Good trust accounting soft wares can very easily replace all your manual bookkeeping tasks. They can provide you with a greater control over all your trust accounting activities. With that you will be able to simplify the various tasks of transaction entries, trust cheque printing, bank reconciliations and generation of reports. One will also be able to readily detect any possible errors and can maintain an audit trail if any changes are made in the trust books. It will also make it easy for bookkeepers to review the trust data in order to make appropriate corrections without having to wade through stacks of paper.
Another aspect is that as and when a client matter gets completed, the balance on the client's ledger turns zero. Once all the relevant transactions have been reconciled with the corresponding bank statements, one should ‘close’ or archive the client ledger. If not, over a period of time, you will have to ‘deal’ with thousands of ‘open’ client ledgers. Make it a point to protect the trust software data file. It is a fact that a computer system or software can be replaced, but the data lost is not at all easy to re-create. So, for trust accounts, one must always maintain hard copies of client ledgers; and that too on a monthly basis. Make it a point to have regular backup copies of the trust database files and one has to store them at some far off locations.
One should avoid having commingled bank trust accounts. A client trust bank account can be called a special kind of account. In the present day, many banks promise a particular type of trust account that has separate sub accounts for each and every client.
A bank account which allows a person to manage individual client funds, that too separately, provides a sort of double layer protection for your firm. This is because a bank can always alert you to a possible client ledger overdraft situation. In addition to that, you will also get to receive monthly client ledger trial balances from the respective bank which you can, at a later stage, match with your office ledger records.
