Many small law firms and practicing attorneys use QuickBook, which is the most popular small business accounting software on the market today.
If your law firm has chosen to use this program, the first task will be to set up the chart of accounts to track the transactions.
However, you will have to tailor your chart of accounts to comply with your state’s Interest on Lawyer’s Trust Accounts (IOTLA) program .
What Is IOTLA?
Interest on Lawyers Trust Accounts (IOLTA) is an innovative way to increase access to justice for individuals and families living in poverty and support improvements to the justice system through the use of interest earned on certain lawyer trust accounts.
IOLTA programs is a public service, and what makes it unique is that this service is provided without taxing the public, and is provided without cost to either your or your clients.
How Does IOTLA Work?
Through IOTLA, as a lawyer, when you receive money that belongs to a client, you must place that money in a trust account. The trust account must not be commingled with the your law firm’s funds; your clients’ money must be held in a separate trust account that is separate from the bank account used for your firm’s day-to-day operating activities. You must deposit your clients’ funds in an IOLTA account when the funds cannot earn enough income for the client to be more than the cost of securing that income.
