I have noticed several law firms are not reviewing the monthly bank reconciliations that are produced the law firm’s practice management system.
It is extremely important that the legal practitioner of the law firm review and sign off the monthly bank reconciliations of the trust account.
When reviewing the bank reconciliation, you should be checking the items that appear in the adjustment area of your reconciliation. These adjustments generally will occur at the end of the month when your accounts staff find transactions on your bank statement that are not entered into your practice management system. I recommend that they items should not be older than one month.
The other important area to review are the unpresented cheques. A cheque that is older the 15 months is classified as a stale cheque and should be cancelled at the bank and in your practice management system.
If you are using LEAP you can reverse the cheques as follows:
- Open the matter containing the trust cheque
- Navigate to the Trust Funds tab
- Double click on the trust cheque to be reversed
- Click on the Reverse Icon
- Supply a reason for the reversal in the reason field and click Save & Close
If you need assistance or training on LEAP please contact Caroline Kessler at Legal Practice Management Consultants via email caroline@lpmc.net.au or visit our web site at www.lpmc.net.au.