Managing Trust Accounts (IOLTA)
Track client trust fund balances and apply trust payments to invoices
Trust Accounts in LawBillity help law firms manage client trust funds (IOLTA — Interest on Lawyers' Trust Accounts) with proper accounting and compliance. This feature tracks deposits, withdrawals, and balances for each client's trust account, giving you the transparency required by bar association rules.
Setting Up Trust Accounts
- Go to Settings > Trust Accounts.
- Enter your firm's trust bank account details (bank name, account number, routing number).
- Enable trust account tracking.
- Click Save.
Managing Client Trust Funds
- Deposits — Record retainer payments or other deposits into a client's trust account. Each deposit is logged with the date, amount, source, and description.
- Withdrawals — Apply trust funds to invoices when billing the client. When you finalize an invoice, you can deduct the amount from the client's trust balance.
- Balance Tracking — View the current balance for each client's trust account at any time. The balance updates automatically as deposits and withdrawals are recorded.
- Reconciliation — Reconcile trust account balances against your bank statement on a regular basis (most jurisdictions require monthly reconciliation).
Trust Account Reports
Run trust account reports to see transaction history, current balances, and reconciliation status across all clients. These reports are essential for bar association audits and internal compliance reviews.
Important: Trust accounting rules vary by jurisdiction. LawBillity provides the tracking tools, but consult your bar association's guidelines for compliance requirements specific to your state. Commingling client trust funds with operating funds is a serious ethical violation — the trust account features are designed to help you maintain proper separation.
Trust Account management is available on the LawBillity subscription tier.