Our Blog

By Tammy Hoang, Certified QuickBooks ProAdvisor Commingling client funds is the trust accounting violation California attorneys are disciplined for most often, and it almost never begins the way people assume. The attorneys who lose their licenses over it are usually not stealing. They are behind on their bookkeeping. Rule 1.15 of the California Rules of Professional Conduct requires that funds belonging to clients — settlement proceeds, advanced fees not yet earned, money fo

By Tammy Hoang, Certified QuickBooks ProAdvisor An attorney trust account audit in California follows a defined checklist. The reviewer is a Certified Public Accountant approved by the State Bar, the engagement is agreed-upon procedures rather than a traditional audit, and the document requests are predictable. That predictability is the good news, because it means a firm can be ready in advance. The State Bar began mandatory reviews on September 29, 2025, notifying selected

By Tammy Hoang, Certified QuickBooks ProAdvisor QuickBooks IOLTA accounting works well when it is structured correctly and fails badly when it is not. The software does not know that the money in your trust account belongs to your clients. It will let you pay a firm expense from the IOLTA without a warning, and it will reconcile the account cleanly while a client ledger sits negative. That gap is where California firms get into trouble. With the State Bar selecting up to 800

By Tammy Hoang, Certified QuickBooks ProAdvisor IOLTA three-way reconciliation is the single most important control in law firm accounting, and it is the first thing a State Bar reviewer asks to see. If your California firm holds client funds and cannot produce twelve months of written reconciliations, the conversation goes badly from there. The requirement is not new. California adopted the Trust Account Record Keeping Standards in 1993, and the duty to reconcile monthly has

By Tammy Hoang, Certified QuickBooks ProAdvisor A CTAPP compliance review is no longer a rare event for California attorneys. The State Bar of California now selects up to 800 licensees every year for a mandatory examination of their client trust account records, and the notice arrives without warning. If your law firm bookkeeping has been handled casually, that letter is the moment it stops being casual. The Client Trust Account Protection Program was created after the Girar

By Tammy Hoang, Certified QuickBooks ProAdvisor Every California attorney who handles client trust funds is now required to comply with CTAPP — the Client Trust Account Protection Program — a State Bar initiative that layers annual registration and self-assessment requirements on top of the existing trust accounting rules under Rule of Professional Conduct 1.15. If you are asking what CTAPP means for your law firm, the short answer is that it changes how the State Bar verifie

By Tammy Hoang, Certified QuickBooks ProAdvisor Every state bar in the country requires attorneys handling client trust funds to reconcile their trust accounts regularly, and nearly every one of them expects something more rigorous than a standard bank reconciliation. That standard is three-way reconciliation: confirming that three separate numbers — the trust account's bank statement balance, the firm's internal trust ledger, and the sum of every individual client's ledger b

By Tammy Hoang, Certified QuickBooks ProAdvisor If your law firm is taxed as an S corporation, reasonable compensation is one of the most important tax issues you will ever face — and one of the easiest to get wrong. Many attorney-owners hear that S-corp distributions avoid self-employment tax and decide to pay themselves a tiny salary while pulling most of the money out as distributions. The IRS is very clear that this does not work. An S-corp shareholder who performs real s

By Tammy Hoang, Certified QuickBooks ProAdvisor Attorney compensation is one of the most sensitive subjects in any law firm, and it is also one of the most misunderstood from a bookkeeping standpoint. This guide is not about how much an attorney should pay themselves — that depends on each firm's situation and is a conversation for your tax advisor. It is about how compensation is recorded once those decisions are made. Partner draws, salaries, bonuses, profit sharing, and eq

By Tammy Hoang, Certified QuickBooks ProAdvisor Opening a new law firm is exciting, but the financial setup is where many new attorneys feel lost. Law school teaches you how to practice law, not how to structure a firm's bank accounts, set up an IOLTA trust account, or build a chart of accounts that keeps you compliant. The good news is that getting the money side right from day one is mostly a matter of working through a clear checklist. This guide walks a new law firm throu

By Tammy Hoang, Certified QuickBooks ProAdvisor Getting a State Bar trust account notice in the mail can make any attorney's stomach drop. Before you panic, the first thing to understand is that not every notice means you are in trouble — and the right next step depends entirely on which kind of notice you received. Some are routine, some are time-sensitive, and some are serious. What they all have in common is that they turn on your records: clean law firm bookkeeping and a

By Tammy Hoang, Certified QuickBooks ProAdvisor When a law firm first reaches out about law firm bookkeeping, the conversation almost always sounds the same. The attorney is not sure whether they need a full cleanup, they are uneasy about their IOLTA account, and someone has probably told them their books are 'fine.' Over years of working with law firms, we have heard the same honest questions again and again — about start dates, IOLTA reconciliation, how long catch-up takes,