1. Choosing an Accounting System
It is the trust account supervisor’s responsibility to ensure that a proper and effective record-keeping system is in place. This includes maintaining up-to-date trust records and preparing the required reconciliations on a monthly basis.
The first decision you will need to make is whether you wish to use a manual or electronic accounting system. Many members who still use a manual system seem to feel that they should be using computers instead. They shouldn’t feel that way.
Each system has its advantages and disadvantages.
A manual system is well suited to a member who doesn’t have a significant volume of trust transactions. It is also inexpensive and may be easily adapted to meet the member’s needs, while still complying with the rules. Simple basic journals and ledgers may be purchased at any office supply store, or some practitioners even use the audit department’s templates. A new practitioner may wish to hire an accountant/bookkeeper to help set up the required bookkeeping system. It is also useful to talk to other members with similar practices to see what system has worked well for them. You may also contact an auditor of the Law Society of Manitoba for direction.
Those finding the manual system time consuming may wish to switch to an electronic (computerized) system.
An electronic system can provide a wide range of timely information which is not quickly obtained when using a manual system. Other benefits include ease of recording transactions, eliminating certain types of errors, and various controls which are built into some of the systems. However, the system is more expensive to acquire and maintain.
An additional option would be a ‘semi’ electronic system where a spreadsheet program such as Excel is used. While the fluent user of the program can set up various spreadsheets for the records and usually eliminate addition errors, it lacks some of the controls built into specially designed accounting software.