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By Tammy Hoang, Certified QuickBooks ProAdvisor Once a settlement check arrives, the clock is running. Clients expect their share, lienholders expect payoffs and a referring attorney may expect a fee. A well-run settlement disbursement pays everyone who is owed, promptly and correctly, from the right client's ledger, and leaves a record showing who authorized what and when. This guide follows a settlement from deposit to final payment: what to confirm before paying, how to pa

By Tammy Hoang, Certified QuickBooks ProAdvisor Plenty of small firms run their trust accounting on Excel or Google Sheets. It is familiar, it is free, and at first it seems to work. The problem is that an IOLTA spreadsheet does very little to stop the mistakes that matter most in a trust account, and it leaves almost no trail when something goes wrong. This guide covers where spreadsheets break down, why switching software is not the whole answer, and a practical way to move

By Tammy Hoang, Certified QuickBooks ProAdvisor Many attorneys hand the monthly trust reconciliation to a bookkeeper and consider the matter handled. It is not that simple. IOLTA reconciliation responsibility can be shared in the work, but not in the duty. The bookkeeper prepares; the attorney remains answerable for the trust account. This guide sets out a practical division of labor for California law firms, and the review every attorney should do before signing. IOLTA Recon

By Tammy Hoang, Certified QuickBooks ProAdvisor A law firm entity change, such as a sole practitioner incorporating or a partnership restructuring, is mostly a tax and legal decision. But it reaches into the trust account as well. New tax identification numbers, new bank paperwork and new account names all touch the one account where the firm's own money must never appear. A careless move can leave client ledgers and the bank out of step, and that is the kind of mismatch a re

By Tammy Hoang, Certified QuickBooks ProAdvisor Each year, California attorneys complete an IOLTA annual certification in the form of the State Bar's Client Trust Account Protection Program, known as CTAPP. It is a formal process in which attorneys register their trust accounts, review their practices and certify that client funds are handled correctly under the rules. It is not just another box to check. It is a step that shows your firm's commitment to ethical practice and

By Tammy Hoang, Certified QuickBooks ProAdvisor Neglecting to perform proper IOLTA three-way reconciliation can expose your firm to significant risk. Without this critical monthly check, discrepancies between your internal ledgers, client ledgers and bank statements can go unnoticed, sometimes for months or even years. That undermines your ability to track client funds accurately and increases the likelihood of errors, mismanagement and potential overdrafts. Regular three-way

By Tammy Hoang, Certified QuickBooks ProAdvisor For law firms, the correct handling of client funds is not only a best practice but a crucial ethical obligation. This article explains the purpose of trust accounts, how they function, and how to manage them effectively. It also separates the two kinds of accounts that attorneys most often confuse: the pooled Interest on Lawyers' Trust Accounts (IOLTA) and the individual client trust account. The question most guides skip is th

By Tammy Hoang, Certified QuickBooks ProAdvisor IOLTA eligibility depends on state bar regulations. To qualify, a bank must manage the account properly and handle interest allocation as the rules require. Knowing these criteria lets attorneys select financial institutions that comply with legal standards and offer the best financial benefits for their practice. If you are considering a financial institution that is not currently listed among the approved banks, it is importan

By Tammy Hoang, Certified QuickBooks ProAdvisor ECR financial institutions set themselves apart by paying a defined minimum interest rate on IOLTA accounts: at least 68 percent of the federal funds rate or 0.68 percent, whichever yields the higher return. The rate is called the Established Compliance Rate, or ECR. These institutions offer attractive baseline rates, but some may charge fees for managing IOLTA accounts, and those fees affect the overall value of the relationshi

By Tammy Hoang, Certified QuickBooks ProAdvisor Comparable banks are another segment of IOLTA-eligible financial institutions. They agree to pay interest or dividends on IOLTA funds that match, or at least do not fall below, what they pay on similar non-IOLTA accounts. Unlike banks in the higher tiers, comparable banks may charge routine fees and typically offer lower interest returns, so their contribution to civil legal aid tends to be smaller. They meet the basic requireme

By Tammy Hoang, Certified QuickBooks ProAdvisor Comparable banks are one tier among IOLTA-eligible financial institutions. These banks choose to pay interest on IOLTA accounts at rates similar to what they offer on comparable non-IOLTA accounts, though they may still assess certain fees. When it comes to generating IOLTA interest income, comparable banks typically deliver lower returns than Leadership Banks or Earnings Credit Rate (ECR) financial institutions. As a result, ch

By Tammy Hoang, Certified QuickBooks ProAdvisor IOLTA-eligible financial institutions are banks and credit unions approved to hold Interest on Lawyers' Trust Accounts, meeting the specific requirements set by state regulations. These institutions agree to handle client trust funds securely while paying competitive interest, and the interest they remit helps fund civil legal aid. Most partner with the state bar and support the IOLTA program's mission. They must follow regulato