Tag Archives: trust fund accounting
People new to the real estate industry are often surprised to discover that the sale or purchase of property is only one small part of the overall job. There is a tremendous amount of administrative support required for each transaction, none as important as trust fund accounting.
When you receive money to be disbursed to other parties such as another real estate agent, the government or a home inspection agency, you need to be certain that every penny listed on the HUD settlement statement form ends up where it needs to go. And when we say “every penny” we mean that literally. If you misplace even a cent out of hundreds of thousands of dollars then you could be subject to serious penalties.
You may think that it’s not that complicated. You simply look at the amounts list on HUD forms and pay accordingly, right? That might be true if you are handling one client, but any successful real estate professional has multiple deal in the works at one time. Agencies that employ multiple agents might process dozens of sales in a day. All of that money is being funneled through a single trust account, and if the money from Mr. Smith ends up paying expenses for Mr. Jones then you have a problem.
HUD settlement statement software helps you keep track of all the various charges associated with a given transaction including taxes, fees and commissions. It simplifies the process of completing this long and complicated form and takes care of everything from spellchecking to arithmetic. Unfortunately it doesn’t track your trust transactions.
That is unless you use HUD software that integrates with trust software. That’s why our products Easy HUD and Easy Trust are designed to work together. Export your ledger from Easy HUD for quick import into Easy Trust and you can effortlessly track all your trust transactions. You can view each client’s balance and transactions within your trust account separately, ensuring that all the money is accounted for and all the necessary fees are paid.
This kind of integration is the kind of attention to detail you can expect from Easy Soft legal practice management software. Visit our website to find out more about how our software simplifies your real estate or legal practice, leaving you more time to service clients.
The transition to cloud software makes some attorneys nervous. Client confidentiality is core to the legal practice, especially for tasks such as trust fund accounting. Is it really safe to use cloud-based legal billing and accounting software? Absolutely. In fact, it’s probably safer than using desktop tools.
Think about it in legal terms. The average citizen can file bankruptcy, get a divorce or even face criminal charges without an attorney but it’s rarely the wise choice. There are so many pitfalls and subtleties to even the simplest laws that the best option is to hire a lawyer to get access to the legal expertise necessary to resolve the case successfully.
Just as it’s best to let attorneys handle legal matters, it’s best to let IT experts handle escrow software matters. Does your practice have a dedicated digital security team? Probably not. Even the largest firms can’t afford to employ the level of talent you’ll find at a typical cloud datacenter.
When you trust your attorney time and billing software to the cloud, you are turning the technical duties over to experienced IT professionals. They make sure the software is always up to date against the latest security threats. They employ the latest software and security tactics against viruses, malware and hackers. They house your information on redundant storage networks housed in physically secure locations. They back up your software regularly allowing easy recover in the event of disaster.
Your online transactions are protected by the same encryption technology used by global financial organizations. It’s just as safe as doing online banking. Your information is also encrypted when it is stored so that only you can access it. Even Easy Soft employees and IT workers at our datacenter can’t look at your files.
We spent a great deal of time and effort ensuring that the cloud-based versions of our law practice management software were secure before we released them to the public. We have built a reputation of trust among our clients for over 20 years and we weren’t going to jeopardize that by offering an inferior product.
Contact one of our software specialists at 800-905-7638 if you have any questions about the security of Easy Soft’s cloud-based products or any other aspect of our line legal practice tools.
Paralegals are vital components of any medium to large law office. They have the knowhow to take on some of an attorney’s more routine duties at a much lower cost to the practice and the client. However attorneys need to judge whether a task is appropriate to a paralegal’s ability and integrity, especially when it comes to trust fund accounting.
Most law offices indulge in a certain amount of money management for their clients. They are responsible for collecting fees and retainers and ensuring that these monies are spent appropriately in the client’s interest. Maintaining separate bank accounts for each client would be an administrative and cost nightmare so most funds are merged into a central fund called an IOLTA (Interest on Lawyers Trust Accounts).
Monitoring the funds of potentially dozens of clients and keeping them separate isn’t as hard as it used to be with modern legal billing and accounting software with built-in trust functions. Even with these applications the routine bookkeeping can be a chore and a waste of an attorney’s time so this is an ideal task to turn over to a paralegal…or is it?
Trust accounting mismanagement is one of the leading sources of ethics complaints against law practices. Deliberate fraud is rare but even clumsy accounting practices can lead to serious financial penalties, a damaged reputation and loss of clients. On the one hand such a vital task should perhaps be kept in the hands of a lawyer but on the other hand, seriously, this stuff puts accountants to sleep.
If you are going to turn these functions over to a paralegal then be sure to provide adequate training in trust law and in proper operation of the attorney time and billing software. The paralegal should never feel lost and should be encouraged to ask questions if confused at any point. This is not a “close enough” function. Every penny must be accounted for and applied to the correct matter.
Some other party, probably one of the attorneys, should oversee the paralegal and occasionally audit the records. Networked attorney practice management software keeps the auditor from having to look over the paralegal’s shoulder and makes it easy to keep an eye on client accounts. If anyone in the firm notices a discrepancy it should be reported immediately.
Easy TimeBill software includes Easy Trust, our fully-compliant escrow management application. Contact us to find it help you administer IOLTA accounts safely and securely.
Managing trust funds for multiple matters in a single bank account is a common practice in the legal industry but attorneys must be very careful not to let the funds intermingle. Each matter has to be scrupulously maintained as a separate entity and never “borrow” money from other matters in the same bank account. Law offices have several options for documenting trust accounts .
Manual Books – It’s rare to find a business that keeps their books in literal books anymore, but a few firms, particularly single-attorney practices, prefer manual bookkeeping. Manual bookkeeping is slow, susceptible to arithmetic errors that can take hours to track down, and clumsy when it comes to tracking multiple matters in a single account. Computers are commonplace and software is cheap so there really isn’t any practical reason to work with pen and paper anymore.
Spreadsheets – Raise your hand if you remember VisiCalc. Wow, you’re old! VisiCalc was the first spreadsheet program released in 1979 and was designed to mimic the manual ledgers bookkeepers used. Trust fund accounting with a spreadsheet is a step up from manual books since it eliminates arithmetic errors, and nearly every computer comes with Microsoft Office preinstalled so the software is effectively free. However it is difficult to track individual matters within an account or reconcile an account without a lot of sorting and other manipulations.
Personal Finance Software – Applications designed to help consumers track their checking accounts and credit cards add reconciliation functions and are significantly less expensive than business software. Matters can be tracked in an account by using the client as a budget category. On the other hand there are no protections to prevent you from overdrawing a client’s trust fund, a critical error in trust management, and no ability to network across multiple attorneys. This might work for a single-attorney practice but is not an ideal solution.
Business Finance Software – Products like QuickBooks or Peachtree offer double-entry bookkeeping, which reduces the chance of keying errors by requiring all transactions to balance out. They can be networked across the firm and data can be manually transferred to escrow accounting software like Easy Trust but still are more limited than solutions tailored to legal trusts.
Dedicated Trust Applications - Only legal billing and accounting software will have all the features needed for fast, accurate and secure trust management. Integrated trust features ensure that each matter is accounted for separately. Attorneys can see trust status at a glance without having to pick it out from all the other transactions in the bank account. Automatic warnings let the firm know when a trust balance is getting low, and three-way reconciliation ensures no money falls through the cracks.
Attorneys might be worried that specialized legal software is more expensive than the alternatives, but Easy Soft’s law practice management software is surprisingly inexpensive. Try our trust account suite and if you aren’t completely satisfied, then return it for a full refund within 30 days.
In our last post, we mentioned that each of Easy Soft’s software packages are all-inclusive—in direct contrast to your standard legal software package. For one yearly cost (typically less than one hour of billable time), you get:
- Software Procurement.
- Complete Training for your attorneys and staff.
- Ongoing Educational Support geared towards your practice.
- Technical Support—crucial in the event of outages, breakdowns, data loss, etc.
- Personalized Service. During business hours, a human being always picks up the phone.
- One Nominal Yearly Fee, so that you can plan your annual budget accordingly.
- No Hidden Fees.
Today, we wanted to mention a few extras that add to the value behind Easy Soft’s legal software packages.
One. Although Easy Soft specializes in making life easy for lawyers, our Technical Support Team and Business Analysts can introduce you to further administrative efficiencies you haven’t thought of—and won’t immediately discover. Our Business Analysts live and breathe not just technology—but the art and science of increasing the efficiencies behind your specific practice and small business.
For example, for optimum utilization of Easy Time Bill (ETB) Software, straight hourly billing differs from retainer or fixed fee billing, and both differ greatly from contingency billing. ETB contains special features to be used in tandem with our Easy Trust Software. We set you up right the first time, so there are no errors—only ease, efficiency, and incredible convenience.
Two. We absolutely practice what we preach. Our company aims to create efficiencies for our customers—not just for the first three months after you give us your business, but for the entire life cycle of your software. Take our training webinars.
At the outset, we live-host weekly software training webinars for all products of Easy Soft. During each live hosting, there might be a few dozen participants. Typically, a recorded copy of the webinar is also available online—at your convenience, and the convenience of each of your attorneys and staff members. What could be easier than that?
Three. We don’t believe in off-shore outsourcing. All of our programmers and technical support personals are located in the same Easy Soft headquarters—right here in New Jersey. If a question arises that our skilled and able Tech Support Team doesn’t have answers for, they can turn immediately to our Business Analysts for more complete information. In other words, your call goes right to the source. One way or the other, we are likely to have a speedy answer for you—with full comprehension of your issue, and without messy language barriers.
In our last post, we talked about the services triggered by new legal time and billing software: software training, software setup, and practice customization. Today, we’ll discuss how an all-inclusive package is mandatory for even the most technologically savvy of attorneys and law firms.
Most legal time and billing software companies offer you email only or limited # of phone calls type technical support. When this runs out, you procure your own—or use their—additional training and setup through a subcontractor typically charging $125/hour and up.
You might say this sounds adequate. But even if you yourself are technically savvy, consider:
1. Your fellow attorneys, paralegals, assistants, and any new hires—an unknown factor—might need additional handholding.
2. You’ll need to explore your new software extensively—through time-consuming trial and error—to figure out its particular efficiencies and special features. But why reinvent the wheel?
3. You’ll never be in complete control of your PC. Machines go down, and when they do, you’ll need expensive contractors to recover systems and data—unless you have an all-inclusive software package.
In contrast to the standard legal time and billing software package, all of Easy Soft’s software packages are all-inclusive. For one low yearly cost, Easy Soft provides all of the technical support, educational support, and setup advice that you need for every piece of legal software you purchase from us.
We believe we are the only major legal software company in the U.S. whose prices include:
- Software License.
- Complete Unlimited Training for your attorneys and staff
- Unlimited US Based Phone/Email Technical Support—crucial in the event of outages, breakdowns, data loss, etc.
- Personalized Service. During business hours, a human being always answers the phone.
- One Nominal Yearly Fee, so that you can plan your annual budget accordingly.
- No Add-On Fees—ever for these services.
In total, your software costs for the year will probably add up to less than one (1) billable hour for a single attorney in your firm.
So you get a) the incredible price, and b) worry-free technology geared specifically toward making your legal practice the most easy and effective it can be.