Trust Club: Trust Accounting the Check Method
Trust Accounting the check method is a method I see with established firms with the partners that have the accountant or bookkeeper write a check from the IOLTA or Trust Bank Account to be deposited into the Operating Account. One check per client. That can involve lots of checks each month at the billing cycle time. Last week I had a little fun with the trust club. One of my favorite articles that explains trust accounting and the general rules is from the American Bar Association (ABA). You can find that here.
That post generated some questions specifically, "how do you record this when the attorney-client writes individual checks for each matter to move the revenue earned?"
The steps are the same as last week. Until that point is when you leave the LeanLaw application and go to QuickBooks Online to make that bank deposit. Here is where the difference lies:
We can tell our values by looking at our checkbook stubs. ~Gloria Steinem
That's it! It's a lot of extra steps that are not necessary if you create a bank transfer. There are times when you probably will run into a client or firm here and there with a process that still does it old-school style with cutting individual checks and taking them to the bank.
So I hope the short video helps demonstrate how to perform this workflow. Next week we dive into cash versus accrual bookkeeping. If you need more help or would like to hire our firm to do this type of accounting work for you, feel free to contact us. Call us today at 239-349-2004