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attorney doc storage - Complete Controller

Though it may seem like a no-brainer, law firms’ actual protocols and processes to stay compliant are complicated. Especially in Trust Accounting (otherwise known as IOLTA Accounting or Escrow Accounting), individual states’ compliance and requirements are of the highest importance.

From keeping thorough records (both print and digital) to grasping the main differences between unearned and earned income, Trust Accounting brings several unique challenges. Let’s look at some of the trust accounting compliance challenges a firm is the most likely face. Check out America's Best Bookkeepers

Challenge 1: Shortage of Trust Specific Rules and Knowledge

Every state has made its audit programs and compliance guidelines that their attornies are responsible for grasping. Further than this, the firm’s bookkeeper(s) and accountants must understand the legal accounting and bookkeeping procedures.

We stress on this point that there are many expert accountants out there who are not familiar with the new and unique trust accounting compliance requirements, and the challenges it brings with it. You need to ask your bookkeeper or accountant regarding their expertise and experience with law firms. 

Challenge 2: Restricted Resources and Means of Smaller Law Firms

Limited resources are another reason for law firms to face challenges in document storage compliance for their attorneys. When we say resources, we mean dedicated resources, IT systems, and training. These resources are reasonably hard to manage by many small firms. Nonetheless, the compliance requirements remain the same for every law firm. Regardless of the firm’s size, the chances of an audit will be the same for everyone. Check out America's Best Bookkeepers

Challenge 3: Systems Operating Manually

Law firms that keep track of their client funds through manual entries on paper spreadsheets increase the chances of errors. The bookkeeping process is slower. Despite the firm’s and attorney’s best efforts, a lot of valuable time will be wasted trying to find where the five-cent discrepancy occurs.

If the law firm makes use of an accounting solution, they need to make sure that the software is set up correctly. This software is not aimed at legal practice. That is why they require extra vigilance.

Challenge 4: Trust Funds Commingled

Commingling is of two main types:

  1. Losing tabs on the client trust account balances. In other words, no distinct ledger cards
  2. Mixing the firm’s funds with the client’s funds needs to be tracked individually

Although you can have various trust funds using one bank account, the trust funds must be recorded separately in the books. Check out America's Best Bookkeepers

Challenge 5: Lack of Safety Measures to Avoid Common Trust Blunders

Some common trust mistakes consist of lack of proof of identity for every matter, commingling of funds, repeated check numbers, overdrafts, and so on. Business owners of law firms cannot fulfill the part of a bookkeeper or CPA. Therefore, it is essential to implement processes and systems that can provide proper tools to the team.

Challenge 6: Disordered Bank Reconciliation

In trust management, bank reconciliation is even more critical. Trust reconciliation has a different way of reconciling as compared to operating accounts. It encompasses the “three-way reconciliation” where the total Individual Card Balance, Bank Balance and Book Balance, and Bank Balance is broken up. It helps you to discover any errors and correct them promptly speedily. This method dramatically helps at the time of the audit.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Law and Justice, Legality concept, Judge Gavel on a black wooden background.
Your work life can get much easier with cloud storage. Because of the use of cloud storage, a user is able to access data and information from anywhere just with internet access. In a law firm, it can help a lawyer answer their client’s question quickly, while the other lawyer is waiting in the courtroom to represent the other client. Cloud storage is an online storage model in which data is stored on numerous, distributed servers on the network, provided for use by customers, mostly by a third party. Data is stored and processed which is, from the client’s point of view, one large virtual server known as cloud data storage.

If you are tired of running around between work and home with a flash drive, always carrying a laptop with the right files, and you want your important files to be accessible to you or your team on any computer or mobile device, cloud storage can come to your rescue. Law firms use cloud storage to save information and client data while managing all of their work in the best way possible.

Advantages of Cloud Storage

  • The ability to access data from any computer that has an internet connection
  • Securing the data
  • High probability of data safety even in case of hardware failures
  • Client pays only their specific use
  • Client does not have to deal with the acquisition, support, and maintenance of its own data storage infrastructure, which ultimately reduces total maintenance costs
  • All procedures for reserving and preserving the integrity of data are made by the provider of the “cloud” center, which does not involve the client in this process

Through cloud storage, we can easily store data with the ease of access anytime, anywhere. It is purchased as a service and provided on demand, which allows you to get the required amount of storage with payment after use. Cloud storage eliminates the need to buy and manage your own storage infrastructure, increases flexibility, and provides global scaling and the ability to deliver data to any place at any time. Cloud storage has made it very easy to store all data and access it whenever you want. Many law firms have started using cloud storage because they can easily store all of the data and information on their clients to securely access at any time.

Cloud storage providers create and maintain an infrastructure to manage resources, security, and reliability, which makes data available for applications all around the world.

Importance of Cloud Storage Usage in Law Firms

Data storage in the cloud allows law firms to fundamentally review three aspects of their activities: the total cost of ownership, time to deployment, and information management.

The Total Cost of Ownership

Because of cloud storage, you do not need to purchase equipment, allocate resources for storage, or spend money on something that “someday will come in handy.” You can add or remove resources on demand, quickly change performance and storage time, and pay only for the resources used. Data that is not used can be automatically moved to more economical levels by rules that are easy to control. This allows for economies of large volumes.

Time to Deployment

Cloud storage allows IT professionals to quickly allocate the necessary space to store data exactly when it is required. As a result, IT professionals can focus on solving complex application-related problems, not on managing storage systems. 

Information Management

Centralized storage in the cloud creates huge opportunities. Using life cycle management policies in cloud storage, you can solve important tasks related to information management, including automatic leveling or data locking for compliance purposes.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.