Many bookkeepers create a surplus ledger to make the account reconcile. This surplus ledger negates the benefit of the reconciliation process, which is to identify errors or inconsistencies quickly so they can be corrected easily. The number of surplus ledgers has increased because (1) the American Land Title Association’s best practices and many title insurance companies require daily reconciliation and (2) most states’ rules of professional conduct for lawyers require regular reconciliations. Lawyers and title insurance agents are feeling the pressure to balance on a daily basis. A result of this pressure is the surplus ledger.
The interest generated in an IOLTA account is transferred to the state IOLTA committee. Even though the interest is put in by the bank and transferred these transactions need to be recorded in the main register in order to produce an accurate reconciliation report. The practical problem with interest is that banks typically credit the interest on the last business day of a statement period then transfer the interest to the IOLTA committee the first business day of the next statement period. Most banks do this monthly although some do it quarterly. Since this money is in the account on the last day of a statement period it needs to be accounted for in order to produce an accurate reconciliation report.
Employee theft from an IOLTA account is a major problem for a few different reasons. First, the lawyer is a fiduciary responsible for the safekeeping of the client funds held in an IOLTA ac-count. Second, the lawyer may be subject to discipline for failing to safeguard client funds and / or failing to properly supervise subordinate employees. Third, the lawyer will be responsible for making the client whole. Employee theft may, depending on the circumstances, be covered by malpractice insurance but if it isn’t the lawyer will need to reimburse the clients whose funds have been stolen by the employee
The interest generated in an IOLTA account is transferred to the state IOLTA committee. Even though the interest is put in by the bank and transferred these transactions need to be recorded in the main register in order to produce an accurate reconciliation report. The practical problem with interest is that banks typically credit the interest on the last business day of a statement period then transfer the interest to the IOLTA committee the first business day of the next statement period. Most banks do this monthly although some do it quarterly. Since this money is in the account on the last day of a statement period it needs to be accounted for in order to produce an accurate reconciliation report. This application allows the lawyer to track interest in the IOLTA account by assigning a separate client identifier. Once a client identifier is assigned the lawyer simply needs to enter the amount of interest credited (and then debited) by the bank into the check register. By assigning a separate client identifier in the check register, the sort function will allow users to account for the interest and produce an accurate reconciliation report.
An IOLTA account is a pooled trust account where a lawyer holds funds for several different client matters at the same time. Within the account every client’s funds must be tracked separately in an individual ledger dedicated to only that client matter. This requirement is the same for IOLTA accounts in every jurisdiction and American Land Title Association (ALTA) best practices for real estate (R.E.) escrow accounts. IOLTA One enables the user to create a ledger for each client matter that records every transaction with a running balance after each transaction as well as the main account register simply by inputting the information once. This saves the user time of inputting the same information multiple times.