Alice considered her prospects. One or two were colorful, most gray, bland and boring. Why is this so difficult? thought Alice, the cute ones that did get my attention don’t actually work, and the boring ones don’t have anything to offer me. Why is it so very difficult to find what I need? Does nobody understand my needs?
Alice was lost in thought. Will it work? Will it work for me? Will I get what I want? Will my needs be met? Or, as has happened so often in the past, will I be left wanting; having to put in extra effort merely to stare at a blank page again, or see answers I do not understand?
Does nobody understand my needs?
Why is this so difficult?
What good is an accounting system, thought Alice, without Investments and a Fee Book? Has no other attorney ever looked at new accounting software? Alice’s rabbit hole was choosing a new accounting solution for her firm. The software vendors all had presentations, but listening to them left her feeling like she was attending a mad tea party. They all keep on telling me that it works, when obviously it does not. Software with hundreds of buttons, that nobody seemed to know the purpose of. Is it too much to ask for just one button, the right button?
Crazy times at the office caused by the #lockdown was affecting the way her staff interacted and the efficiency of operations. Where going to the office to get work done, had been the norm, now it was simply a non-starter. Work still had to be done, but you worked from home most of the time. And to wait for the bookkeeper to go into the office to bring the system up-to-date was no longer an option. Everything seemed to be in slow motion. Nothing was getting done on time, basic accounting reports were never up to date. Every day that went by simply illustrated the impossibility of continuing with what had gone before. With a geographically distributed work force and an increasing workload, a cloud based solution allowing #WorkFromAnywhere appears imperative.
Small law firms face an up hill battle to find cost effective solutions that meet their needs. A needs analysis must take into consideration the regulatory environment which prescribes and anticipates certain behavior. Central to the very existence of a law firm is it’s compliant accounting processes, as described in the Legal Practice Act 28 of 2014, and it’s associated Accounting Rules under Section 95 et al (Rules 54, 55, 56 from 20 July 2018, Gazette 41781, page 72-185).
Further, the attorney is typically more involved with the day-to-day operations of the firm, than in the number crunching expected of the accountant. This makes it imperative to deploy solutions that fit the firm’s operational requirements closely. The ideal solution ought to fit all the firm’s operational requirements, not merely the whimsical demands of a single individual. Poor-fit solutions are a waste of money and often exacerbate the risk of non-compliance.
In addition to compliance requirements, there may be more practical operational considerations, such as
- server based or serverless deployment;
- cloud based;
- access to an online Fee Book;
- client billing: pro forma, invoices and statements;
- purposeful, meaningful reports;
- accessible real-time, accurate, up-to-date reports;
It is not enough to have any accounting solution in place. What is required is a custom solution designed to meet both the firm’s compliance and operational requirements. It should be noted that commercial accounting systems only provide for business books, with none of the technical features required by law firms. Even for small law firms, requirements such as accommodating investments in terms of Sections 86(3) and 86(4) are essential.
Basics should cover at least
- trust and business ledgers
- trust and business cash books
What follows is a suggested list of features a trust account practitioner should expect from any custom lawyers trust accounting software solution. It should be noted that Rules 54, 55, and 56 cover approximately 20 pages. Instead of an exhaustive list of requirements, the checklist presented below is intended as a framework containing basic requirements. This should be expanded by the firm for its own use.
All reports should be functional, easy to read and fit-for-purpose.
|Accessibility||How secure is the login, and how long does it take?|
|Basic operational functionality||The ready performance of a routine operational task. Eg Printing a Trust Receipt. Time from login to final print. Includes file search and processing|
|Trust and Business clearly distinguished?||Is the difference between trust and business transactions easy to discern on all standard report? Rule 54.8|
|Integrated Trust and Business Ledgers?||Can all transaction for a given matter be seen on a single report?|
|Separate Business and Trust Cash Books||Trust money must be deposited into a separate trust banking account. Rule 54.11|
|Trust to Business Transfer support?||Are the reports easy to read? Clearly identifying the matters and amounts? Does the transfer distinguish FEES and DISBURSEMENTS? Auto-Correct on business credit or trust debit balances? Rule 54.11|
|Section 86(3) or 86(4)?||Mechanisms and reports for investments? Rule 184.108.40.206|
|Trust investment report?||List of trust investment accounts by date? Rule 54.16.2|
|Client Billing includes Trust transactions?||Final written accounting report including trust transactions. Is this automated? Rule 54.12|
|Client Balance Lists available?||Commercial accounting solutions provide Financial Reports. Custom compliance reports are a separate requirement. Rule 54.15.1|
|High level trust cash book and ledger report?||Is there a simple, easy to read report available that shows compliance? Rule 54.14.8|
|Storage and backup protocols?||In the unlikely event of selecting a computerized solution, how is access controlled & data stored? Rule 54.14.3|
|Trust Ledger Balance reports?||A firm shall ensure that no account of any trust creditor is in debit. Rule 54.14.9|
|Remote Access?||#Lockdown has accelerated the need for multi-user online remote access solutions that allow #WorkFromAnyWhere. It simply not good enough to wait for some else to supply a report. Log in and get it.|
|Temporary Accounts?||Is there provision for temporary accounts and transactions, such as Fees, before final processing?|
|Management browse access to financial records?||Even with a designated managing partner who controls the finances of the firm, other partners bear responsibility and must at least have readily available browsing access to financial data.|
The good news is that such a system is available. A system which is:
- Simple to use
- Cloud based
- affordable Accounting solution, designed for Lawyers.
Lawyers Trust Account Software