Handling Interest (IOLTA) and Bank Fees when Reconciling your Trust Accounts – Juris

Do you make Journal Entries or Reconciling Entries to account for interest and/or bank fees in your Trust account?  Do you have issues with your Trust Account Balance report not matching your Trust Asset General Ledger balance?  If you answered “Yes” to one or both of those questions, then here’s a helpful tip for you.

We recommend using a Firm Client/Matter to track both interest and bank fees for your trust account.  Setting up a separate matter for interest and a separate matter for bank fees allows you to record Trust Adjustments (i.e. deposits and checks) which can be cleared against these line items on your bank statement.

This process helps ensure that your firm’s total Client/Matter Trust balance always matches your total General Ledger/Checkbook Trust balance.  It also gives you the ability to track interest and bank fees via the Trust Ledger for these Firm Client/Matters.

Before making any changes to your current processes, please remember to check with your state’s bar association about Trust accounting rules to make sure your firm is in compliance.

Happy reconciling!

Nicholas J. Uphoff, Consultant
LexisNexis Professional Services