If you’re depositing retainers and other fiduciary funds into an escrow account, our last post provided some helpful rules of thumb for flawless trust fund accounting—in accordance with your state requirements.
While you weigh the advantages of an integrated attorney billing and trust accounting software, consider this. As a bookkeeping concept, trust accounting is fundamentally different from other types of accounting. It’s way more detailed. It must be capable of:
- Supporting monthly bank reconciliations.
- Producing three-way—not just two-way—reconciliation statements.
- Furnishing details about general ledger balances, i.e. whether funds have cleared the bank.
- Preventing common trust accounting mistakes, such as ledger card overdrafts, co-mingling with other ledger cards, duplicate check numbers, etc.
- Printing checks, deposit slips etc.
Easy Time Bill closes the loop. Our legal billing software provides the following information at a glance:
- Unbilled Balances: The legal billing software totals recorded but unbilled time and expenses.
- Unpaid Balances: The billing software totals billed but unpaid time and expenses.
- Operating Retainer Balance: The billing software displays each client’s current retainer balance – as it sits in your firm’s operating account.
- Trust Retainer Balance: The billing software displays each client’s current retainer balance – as it sits in your firm’s trust account, or escrow account.
Viewing these four balances for each matter at a glance increases your accuracy – and puts you in control of your responsibilities, your accounts, and your cash flow. Specifically:
- If the Unbilled Balance exceeds your comfort zone, you can invoice immediately – rather than waiting until a scheduled billing date.
- If the Unpaid Balances are rising, you can start sending payment reminder letters—along with overdue invoices.
- If your invoices are unpaid, Retainer Balances are available, and your client engagement letter allows you to do so, you can apply the balances to your unpaid invoices immediately.
When you have both software systems, your accounting suddenly works like magic.
Easy, right? That’s why it’s called Easysoft.