Law attorneys have a fiduciary duty to their clients, and that extends to funds clients give to the attorneys, such as retainers and other financial assets. When managing client funds, attorneys must adhere to certain accounting practices and principles in order to handle them responsibly and effectively. SRJ Chartered Accountants is highly familiar with trust accounting for lawyers in Toronto, and can help law firms better manage their clients’ funds.
The first step to attorney trust account management is determining whether a trust account is necessary in the first place. If an attorney receives funds to hold for their clients, or for legal services that have not yet been billed then a trust account is necessary. There are a number of regulations and professional standards with which an attorney must comply when holding those funds, and proper bookkeeping can ensure that the attorney does not inadvertently fail to comply with those regulations.
An attorney must not mingle personal funds with client funds in the trust account. Trust account funds must be limited only to client funds, not money provided for services that have already been billed or for other funds belonging to the attorney. Proper bookkeeping helps ensure that funds have been billed already and are removed from the trust account as quickly as possible, avoiding any potential issues with co-mingled funds. When doing trust accounting for law firms in Toronto, SRJ Chartered Accountants make sure that attorneys can focus more on serving their clients and less on managing their trust accounts.
Trust Bookkeeping for Trustees
Being a trustee is highly important and often overwhelming job. As a trustee, an individual or institution is responsible for managing funds on behalf of one or more beneficiaries. This position creates a number of fiduciary duties that can be difficult to navigate for individuals unfamiliar with the applicable regulations. In addition, for larger and more complex trusts, getting assistance from both the legal and accounting team can be highly beneficial.
That is why SRJ Chartered Accountants provide comprehensive bookkeeping services and trust accounting for law firms in Toronto. Proper bookkeeping can make the trust administration process easier and less overwhelming, and can help trustees manage distributions to beneficiaries.
Aside from these ongoing benefits, good trust bookkeeping practices can be of great help when it comes time to filing tax returns for trusts, and can help with providing accurate accounting. In some instances, regular accounting is needed in order to demonstrate to beneficiaries that proper fund management is taking place and that the trustee is fulfilling all necessary duties. Bookkeeping helps ensure that accountings are well-documented, and can make the accounting and disclosure process much less daunting.
Once it is time to wind the trust down following a terminating event, proper bookkeeping helps provide final statements to all beneficiaries reflecting that the trustee properly managed the funds that were in the trustee’s care throughout the life of the trust. Many attorneys and individual trustees turn to SRJ Chartered Accountants for help with their trust matters. Accounting and bookkeeping services Toronto.