Law Firms
IOLTA trust accounting kept separate from operating funds, reconciled monthly to state bar standards. Client retainers tracked by matter so you know exactly what's earned and what's held.
Two Sets of Books
Law firm accounting operates under rules that most businesses never face. You hold client money in trust. That money does not belong to the firm until it is earned. The state bar requires you to keep it completely separate from your operating funds, reconcile it regularly, and be able to show exactly which client and which matter every dollar belongs to at any time.
Then there is the operating side of the practice. Payroll, rent, malpractice insurance, bar dues, legal research subscriptions, court filing fees. The firm has real expenses that need to be paid, and revenue only comes when client funds transfer to operating after the work is billed and approved. Cash flow depends on how quickly you bill, how much is in retainer, and how fast clients pay outstanding invoices.
Who This Covers
Who This Covers
Solo practitioners, small firms, and midsize practices across New Jersey. Litigation, family law, real estate, estate planning, corporate, immigration. Any practice that holds client funds and needs proper accounting on both sides.
What Makes It Different
What Makes It Different
The IOLTA trust account is not optional. Client retainers, settlement proceeds, and real estate closing funds all pass through trust. Mistakes in this area can result in bar discipline or worse. The accounting has to be right every month.
What We Handle
Trust accounting requires a three-way reconciliation. The bank balance must match the client ledger totals which must match the individual matter balances. Every month this gets reconciled and documented. We track retainers received, disbursements made, and transfers to operating when fees are earned. The records are clean enough for any random bar audit.
On the operating side, we handle the monthly bookkeeping. Expenses are categorized. Bank and credit card accounts are reconciled. You receive financial statements that show how the firm is actually performing. If you have partners, we track production and collections by attorney so everyone knows where the revenue comes from.
Trust Account Reconciliation
Trust Account Reconciliation
Monthly three-way reconciliation of your IOLTA account. We verify that the bank statement, client ledgers, and matter balances all agree. Any discrepancies are identified and resolved immediately, not discovered during an audit years later.
Operating Books and Reporting
Operating Books and Reporting
Full bookkeeping for the firm’s operating account. Monthly profit and loss statements, balance sheets, and cash flow visibility. Payroll if needed. We give you a clear financial picture of the practice so you can make informed decisions about hiring, expansion, or partner distributions.
Common Problems
The most dangerous mistake is commingling. Sometimes it happens innocently. A retainer check goes into the wrong account. A transfer to operating happens before the work is billed. Client costs get paid from operating instead of disbursed from trust. These errors can sit unnoticed for months until someone tries to reconcile and the numbers do not match. By then, untangling the mess takes hours and creates real risk.
The other problem is neglect on the operating side. Attorneys are busy practicing law. Bookkeeping gets pushed aside. Expenses pile up uncategorized. The bank account gets checked occasionally but nobody produces actual financial statements. When tax time comes, the scramble starts. When a partner asks how the firm is doing, no one can give a real answer.
Trust Errors That Compound
Trust Errors That Compound
A transfer recorded wrong in January becomes a reconciliation nightmare by December. Client balances show negative amounts that make no sense. Old matters have funds that should have been disbursed years ago. Without monthly attention, trust accounting problems grow until they require forensic work to fix.
No Visibility Into Firm Finances
No Visibility Into Firm Finances
You know money is coming in and going out. You do not know if the firm made money last month or which practice areas are profitable. Partner draws happen based on feel rather than actual performance. Collections slow down and nobody notices until cash gets tight.
What Changes
Trust accounting is handled properly every month. Reconciliations are complete. Client ledgers are accurate. If the bar ever asks to see your records, you hand over clean documentation without scrambling. The anxiety of wondering whether something is off disappears because you know the accounts are right.
On the operating side, you actually understand how the firm is performing. Monthly financials show profit margins, overhead costs, and cash position. You can have informed conversations about compensation, hiring, or capital expenditures. The numbers are there when you need them for a line of credit application or lease negotiation.
Audit-Ready Records
Audit-Ready Records
Every month, your IOLTA account is reconciled and documented to bar standards. Client balances are accurate. Matter ledgers are current. If you receive an audit letter, you respond with confidence instead of panic.
Focus on Practicing Law
Focus on Practicing Law
The financial side of running the firm stops eating your evenings and weekends. You know the books are handled. You know the trust account is clean. You spend your time on client work and business development instead of hunting down old deposits or fixing categorization errors.
New Jersey's Fractional CFO Firm
The Next Step:
Let's Talk About Your Business
Tell us about your business and what's on your plate. We'll listen, ask a few questions, and give you a clear picture of how we can help.