Abacus Accounting requires that all trust transactions are tied to a matter before you can reconcile your trust account. This is a safeguard to ensure that all trust money is accounted for, and a client's trust money is always associated with that client (therefore minimizing the risk of misuse).
So how do you handle transactions (such as IOLTA) that happen on the trust account, but are not tied to a specific matter or client's funds?
Do NOT enter any of these transactions as journal entries. Bank reconciliation will not be possible until the entries are removed or reversed.
For a video demonstration of these steps, please view this video.
- First, create a new matter in AbacusLaw. This will be a mock matter that is simply used for storing these transactions. Give the matter any name that makes sense to you (e.g. “IOLTA Transactions”).
- Assign a billto to the matter. Typically, this should be your MYFIRM record.
- On the window that appears after adding the billto link, ensure that the Default Trust Accountis the trust account that the transactions will be appearing on.
- If you will be handling transactions for multiple trust accounts, you may want to create a separate matter for each trust account, and assign the default trust account appropriately.
- This matter will now appear in Abacus Accounting. Enter all future IOLTA or other non-matter trust transactions on this matter.
- For interest deposited into the account, use Trust > Trust Deposits.
- For interest withdrawn from the account, use Trust > Trust Demand Check Writer.