How To Handle Special Trust Transactions
Trust management is complicated even at its simplest–and real trust accounts are never simple. This is why it is essential that attorneys use dedicated escrow software designed to handle the unique needs of trust accounts. These tools make it easy to administer even complex transactions.
For example, it’s pretty straightforward that when you receive a deposit for Matter A then you assign it to Matter A in the legal billing and accounting software. But what if you get a check that has payments for Matters A, B and C? It’s not like you can tear the check into pieces and deposit each amount separately, and yet you must keep the funds from intermingling.
Legal accounting software allows you to assign a single deposit to multiple matters from a single screen. The software carefully tracks every penny to the right account so when you print a report on Matter A, you will see only transactions for Matter A including the partial deposit from that check.
It works for withdrawals as well as deposits. Let’s say an attorney hires an outside investigator to research some cases. The attorney pays the investigator once a month but might be paying on a dozen different matters. You need each payment to come from the proper fund but don’t want to issue a dozen checks. Instead you can issue one check and when you record it in the trust accounting system then you can allot each portion of your payment to the correct matters so they will come from the appropriate funds.
Sure you can do these things by hand. Ever since we’ve been recording monetary transactions by making marks on clay tablets, there have been bookkeepers and accountants who meticulously track complex accounts. However you don’t need to do laborious and tedious manual tracking if you use dedicated legal practice software that handles these transactions routinely.
Most of us don’t balance our checkbooks without software, so why wouldn’t you do the same for something as important as a trust account? Explore our site to find out more about how Easy Trust makes trust administration easy and safe for your firm.