By Chiara LaPlume, Esq.
- Although Mass. R. Prof. C. 1.15 requires a three-way reconciliation of an IOLTA every 60 days, you should balance your statements promptly every month. It is considered best practice to reconcile your IOLTA “upon receipt” of the bank statements, so that you can promptly update the interest records and correct any errors. It is therefore highly preferable for all accounts to be reconciled as soon as the prior month’s bank statements are received.
- Reconciliations are also good practice for the operating account.
- Have IOLTA accounts checks printed in a different color or format from the operating account checks, so that they are not used by accident.
- You cannot withdraw cash from an IOLTA.
- You cannot pay any personal expenses directly from an IOLTA account (if a fee is earned, move earned fees into an operating account first, and then from the operating account disburse to your personal account if you have an entity).
- Limit the people who can access checks and sign IOLTA checks.
- Consider investing in accounting software that can help you keep track of your company’s finances. Ideally, the software would be one that your tax preparer is familiar with, that works well with your time and billing software.
- Consider using a bookkeeper to, at the very least, help set up your bookkeeping records and teach you how to use the software, and to help with maintaining your books as needed.
