Ever thought how crucial is capital management while operating a law firm?
After getting clients onboard with your law firm, it’s important to have a record of every transaction you do in your trust accounts. Try keeping all the deposits there, where you can easily manage them. From all the small transactions to the ones ranging in millions.
When you start keeping a track of transactions you make with a client it brings you a wide range of numbers. Storing visible transactions is easy, but what about micro transactions? Now the question as to where to adjust the different nature of deposits arises. Do you have a dedicated place in your ledgers to place these entries which are not included in your income?
The idea behind this blog is to provide a detailed outlet of the IOLTA management software which serves to safeguard the small deposits made by your clients and further helps in investing the money earned from these deposits for numerous charitable purposes.
What does IOLTA mean?
Established back in the 1980s, IOLTA functions in 50 different states, the US Virgin Islands, the District of Columbia, and Puerto Rico. IOLTA – Interest on Lawyers’ Trust Accounts – is a simple method to raise charitable funds primarily for the indigent people.
The US regulatory bodies have their own rules and regulations for handling IOLTA amounts. The interest earned on IOLTA accounts are evenly distributed to low-income residents by providing legal aid and assisting the administrative staff of the justice system as well.
Functionalities of IOLTA Accounting?
1.Seamlessly Handles Small Transactions
The specialty of IOLTA accounting software is that it keeps a small sum that clients pay for their work. It does not take into account big amounts, as a large sum automatically generates income thereon.
The lawyer keeps a separate record for all the transactions that take place in Interest on lawyers trust account software.
2.Enables interest-earning option
Manage small deposits by your clients through CaseFox interest on lawyer trust accounting software and let the small amount deliver interest.
The earned interest is used for charitable purposes and further proper record of interest and amount deposited and withdrawn are made.
3.Easily secures clients money
Client satisfaction is very vital for your law firm to gain success and goodwill. An unsatisfied client may lead to disbalance in the operation of day to day workings of your law firm.
Safeguard each penny given to you by your client in a professional manner with the help of CaseFox IOLTA accounting and secure all the money in a single account.
4.Painless withdrawal of cash
Once you earn a certain amount, then you can effortlessly withdraw it from the client’s account. An unearned amount cannot be withdrawn until a particular work gets completed by you.
The interest earned from IOLTA accounting gets directly paid as a charity, it’s not
considered as lawyer’s payment or income.
5 Perfect Approach to IOLTA Accounting
1.Survival Rule 101
The US has set strict guidelines for the IOLTA accounts management with a designed IOLTA rulebook. A lawyer must properly maintain all the funds and manage time to time entries of each transaction in order to avail higher transparency in client funds.
Improper management of these accounts may lead to strict consequences with IOLTA Check with some serious allegations of unprofessional work.
2.Keep a Timely Check on Client Payments
Clients pay for their work, some pay in advance, some maintain a sum in their trust account. However, it’s a lawyer’s responsibility to keep a check on whether the deposited amount is large or pennywise.
If the deposited amount is large enough, then the lawyer must smoothly transfer it to the client’s trust account by making an entry for the same thereon. However, for a penny like entry the amount can be deposited in the IOLTA account, as the amount may not earn any net worth in the future.
3.The Exceed Limit – IOLTA Money Deposit Guidelines
The United States has released special provision and IOLTA account rules for handling an account. If a client is paying a small amount for a shorter duration or longer duration then the amount needs to be maintained in the IOLTA account.
If the amount is large, then it cannot be kept in an IOLTA account as only a small sum can be deposited which does not provide a future return.
As a lawyer, it’s your responsibility to manage your client’s money securely. You will be accountable for all the transactions and its entry being made. If any penny is being wrongly utilized then it’s you who will be questioned.
Clients’ trust is bound with your way of dealing with things accurately and timely. Make sure you do a proper IOLTA check taking deposits and withdrawals in mind.
5. Ensure Proper Record-Keeping
Every little transaction is important to be jotted and entered. As a lawyer, it’s your responsibility to deliver every report accurately to your client. It’s important to show the correct information regarding your individual client’s funds being held at the particular account to the state bar foundation.
Any record being missed or wrongly entered can lead to questioning and overall reducing the goodwill and trust of the clients of your running law firm.
A law firm deals with two of the most complex heads – Money Management and Capital Management. It’s not a one-time thing to be managed or entered, it needs to be performed at short intervals maybe every month depending upon the law firm operation.
Errors may occur with minute deposits, maybe because of improper record keeping, illegal withdrawing, fraudulent activity, and more. However, to keep a perfect check and utilize additional interest earned properly, it needs to be managed by IOLTA management software.
CaseFox trust accounting (IOLTA) software offers a strong IOLTA accounting module at affordable pricing. One can easily get an instant place to store clients’ small funds and generate interest from IOLTA which is then used for various charitable purposes.
“I’ve been using CaseFox for my firm since 2014. We had used many practice management programs before CaseFox, including Abacus and PCLaw/Time Matters, but CaseFox is much better.Their services are much more reasonably priced than Clio and the other practice management options out there right now, and do the same job in my opinion. They’ve always been very responsive with support whenever we’ve had a question.We have thousands of matters in Casefox with different practice areas, and we use it for IOLTA Accounting, tracking billing and expenses, sending out billing, etc. Everything has always been smooth. Definitely recommend.”