Law Firm Bookkeeping Built for California Trust-Account Rules
Booxmax is a bookkeeping, payroll, and advisory firm.
Monthly three-way reconciliation, a ledger for every client matter, and the backup records that show your IOLTA reconciles every month. For California law firms that cannot afford a trust-account surprise.
[ Book a 20-minute trust-account check ]
The danger is not theft. It is a small error nobody caught.
Almost no California trust-account discipline case starts with fraud. It starts with a reconciliation that slipped. A firm falls a month or two behind, a discrepancy goes unnoticed, it compounds across billing cycles, and by the time the State Bar or a client surfaces it, a bookkeeping gap has become a misappropriation finding. The fix is unglamorous and it works: reconcile correctly, every month, so nothing compounds.
”Reconciled in QuickBooks” is not three-way reconciled
This is where most firms are exposed without knowing it. Clicking “reconcile” in QuickBooks matches your bank statement to your book balance. That is two of three numbers. A real three-way reconciliation also ties the sum of every client’s individual ledger to both. QuickBooks does not do that third match on its own, and many attorneys never learn the difference until a review shows the gap. We run the full three-way every month, for every trust account: bank statement, trust ledger, and the total of all client ledgers, in agreement.
You stay responsible for the books, even when someone else keeps them
This is in the rule, not our opinion. California Rule of Professional Conduct 1.15 makes the responsible attorney “ultimately responsible even if nonlawyers are assigned certain accounting tasks for those funds, such as bookkeeping and banking related to client trust accounts.” A general bookkeeper may keep tidy books and never run that third match, because nothing in standard bookkeeping training covers trust rules. Whether any particular setup creates exposure in your case is a question for you and the State Bar. Our job is to keep the books and the monthly reconciliation the rule’s recordkeeping contemplates, and to use people who do that for law firms specifically.
What we keep, every month
- Three-way reconciliation on each trust account: bank, trust ledger, and client ledgers tied out.
- A ledger per client matter, so every dollar in trust traces to whose it is.
- Backup on every trust transaction, attached in QuickBooks, so if the Bar or a client asks about a specific check, the support is one click away.
- Funds moved out of trust only when earned and invoiced. Never before, never to cover firm cash flow.
- Five-year retention of trust records, on the schedule the State Bar’s recordkeeping standards require.
- Operating books and payroll kept current in QuickBooks Online by Certified ProAdvisors, with monthly reports.
Built for the CTAPP era
The State Bar’s Client Trust Account Protection Program (CTAPP), established under California Rules of Court rule 9.8.5, now requires active California attorneys to register their trust accounts, complete an annual self-assessment against Rule 1.15, and certify compliance at each renewal, and the program backs it with compliance reviews of selected attorneys. We keep the trust books and monthly reconciliation that support the recordkeeping the self-assessment covers. Registering, self-assessing, and certifying with the Bar are yours to file. Keeping the books behind them clean is our job.
What we do, and what we don’t
We are a bookkeeping, payroll, and advisory firm. We keep your books accurate and your trust account reconciled. We do not prepare tax returns, give legal or ethics advice, or audit your books. Trust-compliance judgment routes to you and the State Bar. Income tax routes to your tax preparer. Each lane has a clear owner, so nothing falls between your bookkeeper, your tax preparer, and the Bar.
Work with people who keep law-firm books
Your data lives on a secure 256-bit SSL/TLS client portal. Your books are kept in QuickBooks Online by Certified ProAdvisors who work in trust accounting, not general bookkeepers learning it on your account. We are in Burbank and serve firms across the LA metro.
[ Book a 20-minute trust-account check ] We will look at how your trust account is set up and reconciled, and tell you plainly where it stands.
FAQ
What is a three-way reconciliation? A monthly match of three numbers: your trust bank balance, your trust book balance, and the total of all individual client ledgers. When all three agree, your trust account is in order. It is the single most important trust-accounting control, and the one most often skipped.
Isn’t reconciling in QuickBooks enough? No. QuickBooks matches the bank to your books. It does not, on its own, tie in the per-client ledgers. That third match is where firms get caught.
Do you replace my CPA? No. We keep your books and hand your CPA clean, reconciled numbers at year-end. Bookkeeping and tax filing are different jobs.
Do you handle CTAPP? We keep your trust books in the condition the annual self-assessment is about and retain the supporting records. Registering and certifying with the State Bar is yours to file.
Are you local? Yes. Booxmax, Inc., Burbank, CA, serving the LA metro.
This page explains general bookkeeping and recordkeeping mechanics. It is not legal, ethics, or tax advice. Trust-account compliance judgment rests with the attorney and the State Bar; tax matters route to your tax preparer.
Booxmax, Inc. · 224 E Olive Ave, Ste 217, Burbank, CA 91502 · (818) 485-2669 · Info@booxmax.com · booxmax.com