We wish all our users the happiness and joy of Easter.
DynamicLTA
DynamicLTA lawyers trust account software
DynamicLTA One
DynamicLTA One is designed to be portable, fast and reliable. It uses a local embedded database and generates easy-to-read combined client business-and-trust ledgers, standardized Financial and Management and User reports, including:
- Age Analysis
- Single Ledger History Reports
- Full Ledger
- Trial Balance
- Income Statement
- Balance Sheet
- Client Trust Balance List
- Client Investment List
It also comes with a standard FREE DOWNLOAD and one year student license.
If you are not sure, download DynamicLTA One now and see for yourself! Why wait? Download now!
-Dynamic
Thank you for making DynamicLTA great!
Software Update 1.0.0.263
Description: Bulk Transfer Procedure Allow or Block button
Status: Effective immediately
Date: 2 March 2017
Explanation:
A new feature was introduced at the beginning of March 2017. This allows the use to block the Bulk Transfer Procedure from posting Transfer Journals to ledger accounts.
The update introduces a new button on the Matter Take On screen.
This update requires a Data Refresh in order to work.
After downloading the update, please select this menu item:
This update allows users to toggle Allow or Block of Bulk Transfer Procedure Transfer Journal entries on the selected ledger account. This is an absolute block and will prevent all transfers from occurring.
-Dynamic
Why is DynamicLTA detected as virus / malware by antivirus software?
Antivirus and anti-malware software are essentials to protect our computers against malicious software attacks.
Firewalls protect us from unauthorized internet based access.
DynamicLTA constists of two portions. The actual software and the database.
The database is an on-disk file that just houses the data. The software is the front end that the user sees. The software continuously reads and writes to the database. It is this series of read-and-write processes which the anti-virus software detects and flags as an suspicious and typical of virus or malicious software.
This result where good software is incorrectly identified as bad, is called a False Positive. The test result is positive, that means it has identified a problem, but that test result is false. We want to keep this good software and do not agree that the match is in fact positive. That is why this match is called a false positive.
If it is any relief, other accounting systems that use this type of data read, modify and write cycle are subject to the same scrutiny by anti-virus products.
Usually, the solution is NOT to quarantine, isolate, delete or remove the files in question.
The problem can be neutralized by setting the scanner to exclude the software folder.
The only reliable solution is to set an Exclusion on the Dynamic folder.
Each anti-virus has its own specific mechanism for Excluding files and folders from further scrutiny. Select the Exclusion folder for Dynamic and you should be good to go.
In this example a “c:\dynamic” folder hosts the DynamicLTA installation inside the “fastcar” subfolder. By excluding the dynamci folder, all sub-folders, where the dLTA.EXE application and data is located, are excluded.
-Dynamic
VAT Calculator
The Basic DynamicLTA module is not designed to auto-process VAT. An easy to use built-in VAT Calculator is included.
This means that if you use DynamicLTA Basic for a lawyer who is registered for VAT, inclusive and exclusive amounts can still be easily calculated.
This means that with only the amount and the applicable VAT Tax Rate, the net amount, gross amount, or the VAT portion can be calculated.
Making your life easier.
-Dynamic
to understand DynamicLTA, you need to use it
To understand DynamicLTA, you need to use it. An empty bookkeeping system is like a ghost town without houses.
Please follow the Download link in the top menu.
DynamicLTA is released with a standard student licence. The software can be downloaded free of charge and is free to use for one year for all bona fide students.*
This means that students can prepare their assignments using DynamicLTA and prospective commercial users can learn the workings of DynamicLTA first hand before engaging in a pay-for-use license.
The notice on this page is an abridgment of the Terms and Conditions of the EULA. In the final instance, please refer to the EULA for disambiguation.
Downloads of DynamicLTA software subject to the EULA.
-Dynamic
Happy New Year 2017
Place your trust in good hands
Why you need DynamicLTA to tell Trust apart
Commercial Systems Do Not Distinguish Trust
Commercial accounting systems are designed to report on the business activities of an entity.
Consider the following report from a popular commercial accounting system:
The accounts listed show an age analysis of client accounts. The pink lines reflect debits and the blue lines reflect credit balances. The assumption here is that debits indicate outstanding business debits (accounts receivable), and credits indicate trust credits. The problem with this type of consolidated report is that there is no clear indication of what is trust and what is business. Also, trust debits or business credits may be concealed on this type of report.
To elucidate the problem, the same report is presented here, but sorted on the balance:
Sorting the client balances makes the distinction between debit and credit clear. Unfortunately, commercial accounting systems are not designed to generate reports that clearly distinguish the credit (trust) balances from debit (business) balances. This kind of distinction is only possible in an external report, such as the spreadsheet presented here.
Uncertainty creates confusion. Time is wasted in efforts to acquire clarity on the trust position, or establishing accurate balances for the trust.
The Dynamic Trust
Following the same logic as in the commercial system, these files have been opened in DynamicLTA. DynamicLTA arbitrary account numbers have been allocated and the original numbers stored in Legacy.
A typical Trial Balance consolidates the Trust, distinct from the business accounts.
This Trial Balance gives us an instant indication that the net client ledger trust balances amount to 3694.41, a subtotal which was not apparent on the commercial system.
The Client Balance List is a unique DynamicLTA report designed to provide clarity. Consider the Client Balance List as an analysis of client ledger balances. The report shows, on one line, for each account, the account number, client name and the current business and trust balances. Simplicity and clarity removes uncertainty and confusion.
The Age Analysis of Accounts Receivable provide confirmation of the outstanding business balances.
Dynamic prints its on screen display directly to A4 Landscape size PDF, which makes it both easy to confirm the accuracy of the numbers presented, and also makes for easy email attachments without having to waste time or paper.
Simple. Clear. Distinct. What more do you need?
This shows why using Dynamic Lawyers Trust Accounting software solution for your law firm is essential.
-Dynamic
How to Find a Transaction?
Have I posted this before? What was the amount? To which account did I post this transaction? In any bookkeeping environment, one may lose track of transactions posted.
Fortunately, DynamicLTA has a specialized search function to help find those transactions.
In this example a payment was made to JetSpeed Couriers. Now, we need to find this transaction. We need to identify the account against which it was posted.
The Ledger for the account reflects a 27.50 entry for “BCh JetSpeed Couriers“. We need to identify the original account.
This is not a search on a file name, but rather the contents of a transaction. The menu item FIND A TRANSACTION is located in the Processing menu.
The key is the overview in which to search. Setting the start date too close to the end date will make the search space very small.
Note that
- the search word is not case sensitive
- combined searches on either word or amount or both are possible
This search shows that a transaction where the narrative “jet” was used, it appears on the account #00000 on 2 July for the amount of 27.50. This is the transaction we were searching for.
Note there is a separate search for Files. If trying to locate a specific ledger account, use the standard search with the option. For locating an amount, or a narrative of a transaction, use the advanced search option.
-Dynamic
Two Security Layers
DynamicLTA supports two layers of data security.
Using a sophisticated bookkeeping system like DynamicLTA you want the peace of mind to know that not only is your trust in order, but also that the contents of your system is safe from prying eyes.
DynamicLTA ticks the box when it comes to user access control.
The first layer is the user access secured by a PIN. Keep the PIN safe and you know that nobody can access your software without this PIN. This type of user level access control is typical and expected of financial software.
It is the end user’s duty to ensure the security of the system PIN at all times.
Database Encryption.
In addition to the obvious security measures, DynamicLTA also sports under-the-hood database encryption. Its not just a password to access the database, the actual data is encrypted. This level of encryption is completely transparent to the end user. The end user will not be aware of the security measures in place, but the data is kept safe. Built-in encryption means that once deployed, the system and its database work together and the database cannot be accessed by third party software.
DynamicLTA is a portable system. In the event that the USB Flash Drive on which it is located is lost or stolen, access can only be obtained through the software using the user PIN. The system is safe from general snooping attempts.
The method and type of encryption used by DynamicLTA is confidential and not published. A license does not offer access to the database encryption protocol.
Its good to know that your data is safe.
Access control and database encryption deals with the integrity of the data and database, it does not reduce or remove the need to make regular, periodic backups of the the data.
-Dynamic
How to Process Card Purchases
Law firms, like other businesses, often use card purchases for a variety of business expenses. These cards are often linked to the primary business banking account. Transactions are debited to the card as they occur, and settled once a month with a bank fund transfer to the card.
Assume a Credit Card used for Business purposes.
The steps below show how this should be processed on DynamicLTA.
Required
We will require the following:
- Open an Current Liability account named “Card Purchases” for the card. Do not use a cash book for the card. This Current Liability account is a clearing account and should not carry an opening balance. Eg account number #98001
- The Expense, or Asset account to which the purchase will be allocated. Expense accounts typically start with #91xxx, #92xxx or #93xxx numbers. Assets start with #95xxx or #96xxx accounts numbers.
- In this example we will use account number #98001 as our Card Purchases account.
Note that card related purchases only affect the business.
When a card purchase is made, the purchase will be supported by a cashier’s slip, and will subsequently reflect on the card statement. In our example we need to purchase a new kettle for the office. In this example the kettle is treated as an expense.
Process
Process the following transaction:
- Business Journal, debit the “Office Equipment” account, with the amount on the slip, and credit the “Card Purchases” account. In our example the Office Equipment account is #95000.
- This reflects the expense incurred for purchasing office equipment, and a credit for the card purchase – we need to settle the short term credit provided by the card at month end.
At the end of the month, when the settlement transaction takes place, funds will move out of the Business Bank Account, to settle the balance of the card account. The card account is not a cash book in our system, we only use the Current Liability account named “Card Purchases”.
Process the following transaction:
- Business Cheque against the “Card Purchases” account. This debit the ledger and update the Business Cash Book.
- After this payment, the “Card Purchases” account should be nil and the Business Cash Book reflect the outstanding settlement on the bank reconciliation.
This is a simplified example. Typically the bank settlement will be for a larger amount, and include bank charges. Process this to the normal expense accounts.
It is not necessary to process these transactions manually. Please note that the bank account statement can be imported using Import from CSV. This is not a cash book import. Please see the Import from CSV section in the Help File.
Proceed with the bank reconciliation as usual.
The “Card Purchases” account is a clearing account. It only serves as a place holder until such time as the card is settled.
-Dynamic
A Simplified Chart of Accounts
Designed for functional trust account management, DynamicLTA provides a simplifying, uniform Chart of Accounts layout.
When it comes to file numbers, the rule Re-Use, Reduce, Recycle, does not apply.
All account numbers are five digits in length. Client accounts fill the range 00000-89999, allowing for 90,000 possible client accounts. The business accounts are restricted to the range 90000-99999, allowing 9,999 possible business accounts.
Client files would typically appear like this, numbered in sequential order:
ACNO – Client
A0123 – Lincoln, Abraham
B0124 – Franklin, Benjamin
T0125 – Jefferson, Thomas
C0126 – Capote, Truman (not a precedent)
#89901 Trust Bank Charges and Interest
Nominal Ledger
#90001 Fees Partner 1
#98501 Disbursement Creditor
Search functions make it easy to search for and find the file you seek, while reports have a neat, standardized look.
If a lawyer were to open 1000 new client files every year, DynamicLTA would still be in service after 90 years! 🙂
On the business side, accounts can be typed as Income/Expense, and the traditional Assets, Liabilities, Equity accounts, with a recommended layout, making easy to read reports.
Our design and layout prevents confusion between account numbers which look similar, as the numbers, 00001, 00100, 01000 each indicate a unique reference.
We understand that law firms grow dynamically. From humble beginnings to being a renowned law firm can be a few short steps. We aim to provide an excellent product, to make that entry into the market as smooth as possible.
-Dynamic
Trust Accounting for deposits on services not yet rendered
“Trust Accounting
Manages clients’ deposits on services not yet rendered.”
Quoted from the American Bar Association website.
This is exactly that Dynamic is designed to do: provide a reliable trust accounting software solution which caters for lawyers trust accounts.
Diagnostic Report showing details of Trust and Business transactions |
A screenshot of a Diagnostic Report. Trust and Business transactions are categorized and summarized. |
Ordinary commercial accounting software solutions only provide for a the business books. “Trust accounting” requires that business and trust transactions are maintained with a clear distinction and that trust balances for each client can be easily and accurately determined.
For the small law firm, DynamicLTA is the logical choice!
-Dynamic
Three Step Trust Reconciliation 4
Part 4 of a discussion on lawyers Three Step Trust Reconciliation.
Step 3: Trust Ledger Balance Analysis
In Part 2 we saw that Step One requires a high level overview of the trust position. Part 3 describes how to confirm the Trust Cash part of trust position by verifying that the Cash Book to Bank balances match.
Verification
While Step One requires a very high level test to confirm that the trust assets and liabilities correspond, the next steps require internal verification. We must verify the internal consistency of the reports we rely on.
Trust Ledger Balance Analysis
Now we investigate the client trust ledgers. By definition of the trust, all trust transactions must be allocated to specific ledger accounts, no ledger account may have a debit balance and all ledger accounts must have credit balances.
Client Trust Ledger Balances
Each client should have a separate account in the system. DynamicLTA maintains every single matter as a separate ledger. All trust transactions should be posted to its relevant ledger.
As discussed above, the integrated double entry system, allows for easy processing of transactions. The List of Client Balances and Trial Balance will indicate the ledger balance on the selected date.
On commercial accounting systems the Trial Balance will only reflect the business accounts. It is recommended that a List of Client Balances be drawn in addition to the Trial Balance to verify the trust ledger balances. Note that the DynamicLTA Trial Balance includes both the trust and business balances.
A ledger exists for each account. Each ledger contains the details of each transaction, allowing an accurate and complete drill down of each account as it is reflected on the high level reports, right down to the ledger and individual transactions.
Balancing the Trust
Transactions may occur on a client’s business account, which may allow the transfer of client funds from trust to business, such as paying for the professional fees incurred, or direct payment from trust, on behalf of or on instruction of a client.
DynamicLTA has a built in trust-and-business balancing transaction option. This will balance out the trust by generating ledger entries reflecting the amounts affected on each ledger. This is normally referred to as a trust to business transfer.
Regularly balancing the trust will force ledger entries which will balance each individual client trust ledger account, eliminating deficits on individual accounts and transferring surplus amounts to business.
The Trust Balance entry will ensure the integrity of the trust.
Note that this is only a ledger entry. This means that after using this function each individual client trust ledger should have a nil or credit balance. It remains for the lawyer to transfer the money between the trust and business bank accounts.
DynamicLTA allows multiple, repetitive transfers, meaning that such transfers can be done at any time during the month, week or day. Each such transfer will be accurate up to that point in time.
Deficits, or a surplus will appear by comparing the total trust ledger to the cash books. See Step 1: Trust Assets and Liabilities above. Also note that DynamicLTA does not link to any electronic banking facilities. A paper based cheque or electronic fund transfer must still be made between the firm’s banking accounts.
Step Three
Analyzing the client trust ledger will require at least two documents:
- List of Balances or Trial Balance
- Ledger
Client Trust Ledger Balances must not hide a deficit on certain accounts, by allowing a surplus on other accounts.
It is recommended that both the Trial Balance and the List of Client Trust Ledger Balances be used as confirmation of the accuracy of the balances. The risk exists that a deficit on one account may be hidden by a surplus on another account. By inspecting the reports for trust debit balances, such problematic accounts can be identified.
DynamicLTA supports a special six column ledger analysis report designed specifically to make understanding of the business-trust ledger easier.
Ledger History Analysis of a single ledger |
A screenshot of a six column Ledger History Analysis. Trust and Business clearly distinct with running balances. |
Step 1 | Trust Ledger = Trust Cash |
Step 2 | Trust Cash = Trust Bank +/- Recon |
Step 3 | Client Trust Ledger Balances |
Verification of the Client Trust Ledger Balances in Step Three, ensures that the remaining part of our trust position has been confirmed.
In Conclusion
In the discussion above, we have illustrated how the integrity of the lawyer’s trust account can be confirmed.
Think of the Three Step Trust Reconciliation process as a pyramid. At the top of the pyramid we take a very high level view of the trust, by simply confirming that the liabilities equal the assets. The next step is to verify that the assets (cash) are accurately reflected, and the last step is to verify that the liabilities (ledgers) are accurate.
DynamicLTA makes it easy to distinguish trust from business, maintain separate ledger accounts, and confirm the accuracy of both the high level trust and business ledger balances and cash books, and drill down to an individual cash book, ledger or to an individual transaction.
Sophisticated lawyers trust account software. Exactly what your trust needs.
[End]
–Dynamic
Three Step Trust Reconciliation 3
Part 3 of a discussion on lawyers Three Step Trust Reconciliation.
Step 2: Trust Cash Books and Banks
In Part 2 we saw that Step One requires a high level overview of the trust. Start the trust reconciliation with simply comparing the total trust assets to the total trust liabilities.
Verification
While Step One requires a very high level test to confirm that the trust assets and liabilities correspond, the next steps require internal verification.
Trust Ledger = Trust Cash
We must verify the internal consistency of the reports we rely on.
Now we investigate the trust cash books, the bank reconciliation and the bank statements.
Trust Cash Books & Bank accounts
Money is typically not kept on the premises. A common feature of trust accounting is that the trust assets must be secured. In the event of trust cash, this is done in a banking account.
Most jurisdictions have clear rules on which kind of bank account is allowed for use as a lawyers trust account. Generally these accounts will be at established banks or similar. Make sure that the bank you choose is approved.
Traditionally it was not uncommon for a law firm to manage multiple such trust bank accounts. Either a bank account for each client, or bank accounts per practice area, depending on need and regulation.
Each bank account should match a corresponding cash book in the law firms accounting records. Historically a cash book was a massive hard cover book, with analysis columns, used to capture and reflect cash received and paid out.
Bank Reconciliation
Process and Report
To reconcile, or reconciliation mean both
- a process, where by transactions on one report are matched individually to corresponding items on another report, which results in a report; and
- a document, printed out, confirming the result of the matching process, indicating the balances and transactions outstanding.
Reconciliation Process
Bank Reconciliation refers to a process of comparing the transactions on the cash book with the corresponding transactions on the bank statement. This is a recurring event which closely follows reporting periods such as month ends, or quarters. It can be done weekly, and should not be postponed beyond a quarter.
Regardless of local regulation it is recommended that bank reconciliations are conducted frequently. Not only does it verify that the trust cash book corresponds to the trust bank account, it also acts as an early fraud detection and warning mechanism.
Note that the bank statement reflects transactions “in the real world” as processed by the bank. We can not change the bank statement.
What we can change is the cash book. This means that as the bank statement is inspected, the cash book must be compared one transaction at a time, to make sure the transactions correspond. In the event of transactions which occur on the bank statement and not on the cash book, these must be placed on the cash book. An example would be a direct deposit, or fund transfer. Money has been received, but the client has not informed us of this fact yet. A new receipt must be posted to the client trust ledger account to benefit the client, and update the cash book balance. This is a practical application of the rule of thumb “put it where it isn’t”. Note that all transactions reflected on the bank statement must appear on the cash book.
Cash book transactions may not all reflect on the bank statement. These are shown as outstanding transactions. For example, in the event that a cheque (or check in the USA) is drawn on the trust banking account, this may appear on the cash book, but as it has not been presented to the bank for payment, it does not appear on the bank statement. It is shown as outstanding.
Reconciliation Document
It is an error to assume that the trust cash book and bank statement balances must match. Outstanding transactions will affect these balances.
Only after ALL transactions have been accounted for, either as matching both the cash book and bank statement, or as outstanding, will the balances match.
The result of a successful reconciliation process must be an accurate bank reconciliation report document which confirms the balances.
A bank reconciliation report document should at least contain the following:
- the bank balance (from the bank statement)
- the cash book balance (system generated)
- the difference between the bank balance and the cash book balance
- any outstanding transactions
Bank Reconciliation Document |
A screenshot of a bank reconciliation showing the bank balance, the cash book balance, the total of outstanding transactions, and the 0.00 recon result. Outstanding transactions are listed below. |
Note that on an accurate and complete bank reconciliation, the difference should be nil: 0.00 indicates that all transactions are accounted for.
Outstanding transactions represent those transactions which we have entered into the system, which does not yet reflect on the bank statement. Inspect the outstanding items for stale transactions.
Step Two
Comparing cash book and bank balances is itself a process that requires three documents:
- Cash Book
- Reconciliation
- Bank Statement
Trust Cash = Trust Bank +/- Recon
The reconciliation report will indicate and confirm the correspondence of the trust cash book with bank statement balance.
In the event that a bank reconciliation is incomplete or inaccurate, the only conclusion to be drawn is that the cash book does not match up to the bank statement. This means that the first part of the verification process has failed. One of the primary reports used in the trust reconciliation is unreliable, and as a consequence the trust reconciliation has failed.
Step 1 | Trust Ledger = Trust Cash |
Step 2 | Trust Cash = Trust Bank +/- Recon |
Verification of the Trust Cash in Step Two, ensures that at least one part of our trust position has been confirmed.
[Part 4 Follows]
–Dynamic
Three Step Trust Reconciliation 2
Part 2 of a discussion on lawyers Three Step Trust Reconciliation.
Step 1: Trust Assets and Liabilities
When dealing with Lawyers Trust Accounts, several principles apply, and it is convenient to highlight some of these.
Principles of Trust
Generally trust refers to property not belonging to the law firm. Typically this means money, but may include other trust assets, including investments, loose goods and real estate. For the purpose of this discussion it will be assumed that all assets under discussion refer to money.
The Lawyers Trust Account is not a trading trust, or curated estate generating income. It does not trade, does not have a separate income, and is not a distinct legal entity. The Lawyers Trust Account exists because of and as an extension of the legal practice itself.
Defining the meaning of trust
Without reference to any specific jurisdiction, trust means that property which the lawyer holds on behalf of a client, and which does not form part of the estate of the lawyer. The lawyer does not own the trust.
- Trust assets are held apart from the business assets
- Trust assets do not belong to the lawyer or their firm
- Trust assets belong to an identifiable client
This also leads to the somewhat circular conclusion that the lawyer could hold trust assets on his own behalf.
Trust Assets
If a financial category must be assigned to these items, they are best described as extraordinary assets and liabilities, where the client trust ledger account balances represent the liability and the trust cash books represent an asset.
Why as extraordinary assets and liabilties?
In terms of GAAP and IAS all the assets and liabilities of a business must be reflected in the Financial Statements, and by classifying these as “extraordinary”, may be left off-balance sheet. This creates a misrepresentation of the true affairs of the business.
However, consider that commercial accounting system cannot accurately reflect the distinction between business and trust items, and that the trust does not form part of the assets and liabilities of the business. Using a commercial system, the trust would have to be reported separately. In order to provide for consolidated, consistent reports in terms of these directives requires an explanation of the trust assets and liabilities. We call them extraordinary.
Common Practices
Often lawyers will receive substantial amounts of money in advance of work done, based on the common understanding that a certain mandate will result in a quantifiable future charge.
Alternatively lawyers often receive substantial sums of money from third parties on behalf of their clients.
In either event, only once the lawyer has done the work required in terms of the mandate, may funds be transferred from the trust as payment to the law firm’s business account.
When a client deposits money with a lawyer the following scenario obtains:
- the lawyer is entitled to receive that money as payment for work done, reimbursement for expenses incurred; clearly the lawyer is entitled to this payment and it does not represent a trust transaction; or
- the lawyer still has to do work on behalf of the client and is not yet entitled to transfer or receive any of these funds to the firm’s business account, this is a typical trust transaction.
This basic distinction turns on the lawyers entitlement to receive the money. If the lawyer is entitled to receive the money in own right, the money is business money, if the lawyer is not entitled to receive the money in own right, the money is trust money. Please ascertain the local, formal, definition of trust money used in your jurisdiction.
Upon receiving money from the client or third party it is common practice to issue a receipt as documentary evidence of that transaction. This represents only the receipt of money as a distinct accounting entry and does not yet reflect any charge for work to be done or disbursement to be incurred.
By extension, as the ledger must reflect separate provision for trust, so the money must be kept in a bank account separate from that of the business. At least two banking accounts are required, one for business and one for trust.
Where trust money is received, a trust receipt must be issued.
The client’s trust ledger account must now reflect a trust credit entry. The corresponding trust cash book must contain a trust debit entry.
Each client’s trust ledger account balance must match to the balance on the trust cash book.
The images below proceed from the detail of single ledger account, to a high level overview of trust balances. The first screenshot reflects an individual client’s trust ledger account, with a single trust receipt transaction. The second screenshot shows a list of client trust ledger accounts with distinct trust credit balances. The third screeshot reflects the corresponding balances of the trust ledger accounts and the trust cash book.
Ledger History Report of a single ledger |
A screenshot of a Ledger History Report. Client Trust Ledger Account reflecting transaction details. A Trust Receipt transaction, with a closing balance of the same amount. Note that the specific client to whom these funds belong is identified. |
Client Account Balance Listing |
A portion of a PDF print out of the Client Account Balance Listing. Client Accounts Listing distinct Business and Trust Ledger Account balances, reflecting the current business and trust balance on each such account. Note that the specific clients to whom these funds belong are identified. |
Trial Balance |
A portion of a PDF print out of the Trial Balance. Client Accounts are displayed with a leading T to indicate the trust balance. This is totaled in the line marked “*** CLIENT TRUST LEDGER BALANCES”. The individual Trust Cash Books are listed with their respective balances. The Trust Cash Book balances are totaled in the line marked “*** CLIENT TRUST CASH BOOK BALANCES”. The client trust credit balances match the trust cash book debit balances. |
The Trial Balance is a standard report that simply lists all accounts with their balances. In this case a clear distinction is made between the clients’ business and trust accounts and provision is made for clearly and accurately reporting business and trust transactions, and account ledger balances separately.
Step One
Step One of the Three Step Trust Reconciliation process is to confirm that the totals of the trust ledger balances match the total balances of the trust cash books.
Compare the total client trust ledger account balances to the total of the trust cash book balances.
Accounting reports typically use balances as a summary of the result of transactions.
Trust Ledger = Trust Cash
In the example above it is clear that the total of the client trust ledger account balances match the total of the trust cash book balances. The trust is in balance.
Subsequent steps verify that the trust ledger and trust presented in Step One are a true reflection of the total trust position.
It is a common feature of trust accounting compliance assessment that the client balances must correspond with the trust cash. Any difference typically requires reporting and reflects inaccurate bookkeeping practices.
Where the liabilities exceed the assets, a deficit exists and may be indicative of theft of trust funds.
Where the assets exceed the liabilities, a surplus exists and typically represents a positive transfer of funds from trust to business.
Prudence and professional conduct rules require accurate, up-to-date bookkeeping entries and reports which are accurate and complete. Incomplete accounting records do not provide an accurate reflection of the state of the trust and can not be relied on for decision making.
[Part 3 Follows]
–Dynamic
Three Step Trust Reconciliation 1
Part 1 of a discussion on lawyers Three Step Trust Reconciliation.
Introduction
Ordinary commercial accounting software works for any business.
Lawyers need custom software to manage both their business accounts and client trust accounts.
Software tailored for lawyers trust accounts should provide for a clear distinction between business and trust transaction, as well as facilitate the easy reconciliation of the trust.
In the discussion which follows each of the Three Steps of Trust Reconciliation will be explained in detail.
General and Specific
Make sure that you understand the general concepts explained here. Bear in mind that local conditions may vary. It is important to understand that from General Concepts, we work towards Specific Application. Even if the general concept of trust accounting applies to you, your local jurisdiction may have rules which require specific conduct or reports which may be highly localized and unique.
The assumption is that the same basic concept of lawyers trust accounts, trust banking accounts and comparison of balances apply to all jurisdictions.
Make sure you understand what specific rules you need to comply with.
Regulation
Regulation refers to the rules that apply in your local jurisdiction. These may apply at national, state, provincial or local level, or even a combination of these. Regulation stipulates what conduct is acceptable and defines trust assets. Often administrative procedure and conduct and professional liability closely follow the requirements of the regulatory framework.
Compliance
Compliance entails conduct which conforms to the requirements stipulated by Regulation. Compliance entails certain administrative procedure and the production of reports which indicate that the results of conduct reflect compliance with regulation. Non-compliance indicates contravention of applicable regulation and may imply professional liability.
Enforcement
Non-compliance with Regulation typically results in Enforcement of the Regulatory requirements on the local firm to remedy non-compliance and guarantee regulatory compliance. Very often this is accompanied by serious sanctions directed at the responsible lawyer. Worse case scenario outcomes include prison terms for theft and disbarment from the legal profession.
Managing Client Trust Assets
Ethical exhortations not to steal clients funds are often more emotional than practical. The reality is that very few lawyers will actively engage in the theft of clients’ trust assets. Rather, lack of understanding of the regulatory framework and requirements and a failure to implement effective compliance measures, contribute over time to a situation of critical non-compliance resulting in deficits and trust reconciliation failures.
Three Step Trust Reconciliation
DynamicLTA uses easy to use and clear Three Step Trust Reconciliation reports which facilitate understanding of regulatory requirements and allows at sight confirmation of compliance with these requirements. Technology which supports your practice and provides peace of mind.
In the discussion which follows, each of the different Steps in the Trust Reconciliation process is discussed and illustrated with screen grabs from our software.
[Part 2 Follows]
–Dynamic
Local & online: benefits of portable lawyers trust account software
Designed for the Windows Desktop environment, DynamicLTA Lawyers Trust Account software. The Right Stuff. #legaltech #startup #SoloPractice
DynamicLTA is Dropbox friendly and can be installed directly into a Windows Desktop Dropbox folder.
Local Windows installation means that the software is always on your computer. You can work anywhere. The software is available, without requiring an internet connection. Normal operation is independent of both Windows registry entries and an internet connection. The software itself will not write data to folders outside its location and does not access the local Windows Registry.
Portable software can be installed on the local hard drive of the computer, or on removable media, such as a USB flash drive or memory card. Remove the memory card and take the system with you. Plug the memory card into another computer and you can continue working where you left off. Never leave your data behind.
Online availability and access is made possible through the Dropbox connection. Dropbox requires an active internet connection to distribute the data to other access points. It will automatically back up its data inside the Dropbox folder. Even when working offline, DynamicLTA will be fully available and responsive. The next time you connect to Dropbox, the data will be uploaded to the Dropbox servers while you can continue working.
If you change hardware, your software remains in your Dropbox folder, and no DynamicLTA re-installation is required! Simply re-install Dropbox and regain access to your software.
The small application footprint of DynamicLTA makes it possible to install directly into a Windows Desktop Dropbox folder, with no local Windows Registry dependencies. The software is accessed locally, and works like normal Windows software. It is designed as a self-contained application, without external dependencies or requiring internet access.
For the attorney who needs a simulated online trust accounting solution, this is the easiest option to implement. Bookkeeping of clients’ trust money at the touch of your finger tips.
-Dynamic
Why you need DynamicLTA for managing your lawyers trust account today
Ethical Requirements
As a lawyer, your professional ethics require that among other requirements, you keep client’s trust assets separate. This is often easier said than done. On a practical level, it may be as simple as implementing office procedures to ensure that certain actions are always taken in a specific way.
The most common trust goods that an attorney will deal with on behalf of a client is money.
Strictly Regulated Environment
Managing client trust funds is a primary concern of Law Societies everywhere. The concerns of Law Societies manifest in the strictly regulated environment governing legal practitioners. This results in rules such as keeping client and business funds separate, not combining different clients’ funds, accurately accounting for all funds owing to clients and reconciling banking balances to the relevant clients.
Designed for Lawyers Trust Accounting
DynamicLTA is designed specifically for keeping law firm books. It is an integrated bookkeeping system, which provides for both business and trust ledgers, cash books, and financial statements. Clear, accurate, up-to-date reports distinguish trust and business accounts, trust and business transactions and trust and business funds.
DynamicLTA is not a time recording, billing, or case management system. It is a bookkeeping system for law firms.
Reasons to implement DynamicLTA in your firm
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you need it
Compliance with regulation is required, and can be enforced in cases of infringement.
First, your firm is not too small! Second, doing books manually is no child’s play. Third, you are a lawyer, not a bookkeeper, use the right tools.
DynamicLTA as an accounting tool supports your compliance and reduces the risk of infringement. It is a business essential. Trust accounting is not simple, but we can make it easy.
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you can afford it
Working hard for your money, paying for software which does something that can be done manually at no charge seems like a no-brainer. DynamicLTA is marketed expressly at small law firms, at a price which make it the most competitive product in its market niche. For the price of a family dinner you can have an annual license.
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hurry, get it now!
Accurate and up to date financial information is a key management indicator in any industry. Leaving the books until the end of the reporting cycle is an invitation for disaster to strike. DynamicLTA can be implemented immediately, allows for daily transaction processing, daily, weekly, monthly, quarterly and annual reporting, which facilitates decision making, avoids mistakes and detects fraud early. Getting DynamicLTA can not wait, get it now, it is urgent!
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it is your decision
Complacency kills. As the business owner, you are ultimately responsible. The success or failure of your firm depends entirely on your decisions. Failure is lack of management planning. If you are serious about your law firm, make sure you have the right tools in place. You are not too small for DynamicLTA .
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no risk
DynamicLTA is available with a Free Trail and Student License. This gives you ample opportunity to use the product and get familiar with it before you spend money. The Help File is available as a separate download. You can download and use the software before spending any money. Use the software, become acquainted with the workflow and reports so that you can understand how the reports relate to each individual matter. See how it works before you pay.
In addition, we have so much confidence in our product, that we are willing to offer an unlimited seven (7) day money back guarantee on your purchase of DynamicLTA software.
DynamicLTA
lawyers trust account software
What are you waiting for? Get DynamicLTA today! Visit the download page.
-Dynamic
Transparent Bookkeeping
Double Entry Bookkeeping
Typical of the double entry bookkeeping system used is that for every debit, there must be an equal and corresponding credit. Crediting a client’s trust ledger with a receipt must have a corresponding debit entry in the cash book. The sum of the debits and credits must be nil. Confirming that transactions appear on the correct ledger as expected and that the debits and credits are posted as expected is a basic requirement for verifying the transactional integrity of the books.
Fortunately, DynamicLTA has several standard reports that can be used as control documents to verify the integrity of the system.
The various levels of reports make the entire process transparent. Ready verification and instant reporting allows for easy detection of problems.
Control Reports
Financial Statements, Management Reports and Control Reports
Financial Statements
Financial Statements are designed to give a high level overview of the financial affairs of a business. Reporting periods are for longer time frames, such as a year or quarter.
Management Reports
Management Reports are often a lot more flexible than formal Financial Reports, and can provide a level of analysis which Financial Statements do not provide. Management Reports are designed to give management an instant view into the current affairs of the business and can have flexible time frames, including current day, week, or month.
Control Reports
Control Reports are a variation on Management Reports. The difference lies with the audience the report is intended for. Management Reports are aimed at making business wide decisions, affecting time and resource allocation. Control Reports are aimed at the system end-user, to ensure that the day-to-day operations are accurate and verifies processing of transactions.
To confirm that a transaction was posted to the correct ledger
Use the REPORTS > LEDGER HISTORY DISPLAY or LEDGER HISTORY ANALYSIS. This gives a detail breakdown of all the transactions for that account.
LEDGER HISTORY DISPLAY
This can be viewed for a specific time frame, with opening and closing balances, with business and trust columns.
A four column report.
LEDGER HISTORY ANALYSIS
This analysis shows all transactions with business and trust with balances.
A six column report.
To confirm that all the debits match all the credits
Use the Diagnostic Reports under the PROCESSING menu.
DIAGNOSTIC: TRANSACTION SUMMARY
Provides a summary by transaction type, listing corresponding debits and credits. A problem will indicate a transaction type, such as Trust Receipts where total debits do not match credits.
DIAGNOSTIC: TRANSACTION DETAIL
Breakdown my transaction type, such as Trust Receipts will show details of those transactions. This will show all the transactions of the selected type.
-Dynamic
@DynamicLTA is the Twitter account to follow
@DynamicLTA is the Twitter account to follow 🙂
We have successfully completed our migration to our new home.
In future, please visit www.DynamicLTA.com
Regulation requires Compliance: FAQ
Does your accounting software comply with regulatory requirements?
We understand that local jurisdictions may have different requirements, but certain questions get asked repeatedly. We have tried to formulate the questions as accurately as possible, and provided clear, direct answers. If you have additional questions, or an answer does not appear clear, please contact us?
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- Question: What does the name DynamicLTA mean?
- DynamicLTA is an abbreviation for Dynamic Lawyers Trust Account software.
It is a niche accounting software product, designed specifically to provide for business and trust accounting in a single product, with an integrated ledger, IFRS statements and management reports.
Smaller and start-up legal firms typically do not have the multi-user, simultaneous access requirements of bigger, more established firms. These smaller firms however are subject to exactly the same regulatory framework as bigger firms.
Dynamic ensures compliance for small firms.
The system is designed for a single user environment, it is not designed for concurrent users, but provides extensive scope in terms of the transaction amounts or number of accounts.
Bench marking indicates that a typical DynamicLTA installation can accommodate 30 000 individual ledger accounts, with up to 500 000 discrete transactions, without an apparent impact on performance.
- Question: Who should use DynamicLTA ?
- DynamicLTA was developed specifically for lawyers who require a combined business and trust bookkeeping application. If it is a standard lawyers trust account, or an IOLTA account, DynamicLTA is the solution you need. Different labels apply in different areas, a legal practitioner may be described as a solicitor, attorney, lawyer or advocate. If you are responsible for client money, DynamicLTA is the integrated software solution to keep business and trust transactions in one set of books. It was not designed to meet estate or fiduciary trust requirements.
- Long term record retention is provided by the continuous ledger format, which means that historical transactions are not archived. The transaction history is not disrupted with Balance Brought Forward entries.
- Question: How does DynamicLTA distinguish trust and business?
- DynamicLTA provides for separate trust and business transaction processing, automatically posting to the ledger, which maintains this distinction. A typical ledger display will contain clear columns for business debit and credit, and separate trust debit and credit. Business and Trust bank accounts and cash books are maintained separately. All reports clearly indicate the distinction between trust and business entries.
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- Separate, unique accounts for each matter
- Separate Business and Trust ledgers and cash books
- Easy Reconciliation: Cash books & Trust Ledger
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- Question: Does DynamicLTA support Three Way Trust Reconciliation?
- Yes. DynamicLTA allows:
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- Compare trust cash books to trust ledger
- Detail trust cash book to bank account reconciliation
- Client trust ledger balance analysis
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- Question: Does DynamicLTA balance the trust?
- DynamicLTA understands the requirements of reconciling the trust ledger with the trust cash book, at the same time facilitating easy to use balancing of the trust and business books. Easy to read reports indicate the state of the trust at any given point in time, any trust-to-business transfer transactions and the surplus or deficit status of individual client accounts or the trust as a whole. The system reflects user input and does not link to any online bank application for automated bank transactions.
- Question: How is DynamicLTA licensed?
- DynamicLTA is never sold. The right to use is set out in the End User License Agreement (EULA). Licensing is through non-transferable, monthly user based licenses, payable in advance.
- Question: Does DynamicLTA come with after sales support and documentation?
- Yes! After Sales support is available. DynamicLTA comes with an extensive Help File and the Home Page contains extensive additional resources. In addition, the system comes with an built in AnyDesk Remote Support module for internet based remote support.
- Question: DynamicLTA is a Desktop app, but it is cloud based?
- DynamicLTA uses a traditional Microsoft Windows user app, for a familiar, easy to use experience. The data is stored on a cloud server, which means that it can be accessed from anywhere. Why word from the office, if you can #workFromAnywhere? Our Desktop app also allows easy integration with Microsoft Outlook for Windows, which allows the fast and easy creation and sending of email through Outlook.
- Question: How does DynamicLTA ensure the validity, accuracy and completeness of accounting data?
- DynamicLTA is an integrated double-entry accounting system. When a transaction is processed, the user selects the transaction type, enter the relevant account number and amount, and the system processed the relevant debit and credit. The user selects the transaction type and there is no need to indicate the debit or credit. Various time-stamped reports validate the transaction: ledger, type detail, type summary and automated system checks confirm that all entries sum to nil.
- Question: What are the risks of confidentiality and what physical security measures are used?
- DynamicLTA by default requires an access PIN. Restricting access to this PIN number will prevent unauthorized access to the system. Physical security includes restricting access to the computer on which the system is installed.
- Internet access is only available using a user password.
- Question: Should source entries be independently totaled prior to processing?
- This is a user function. DynamicLTA allows for direct processing without batch totals. Transaction are individually posted to the relevant ledger or cash book. Since no batches are posted, no record is kept of batch totals. DynamicLTA does not provide for batch processing.
Diagnostic reports allow for printing of historical entries.
- Question: How does DynamicLTA indicate the source of a transaction?
- Provision is made for both a Voucher Reference and Contra Account Reference in addition to 200 character transaction narrative in addition to internal system protocols.
- Question: Are audit trails distinguishable?
- Transactions are categorized to facilitate distinction, and can be viewed by these categories to diagnose problems, or trace entries. In addition each entry has a unique identifier, a batch-sequence-member identifier and a system date feature.
- Question: Are regular reports available?
- Realtime, live reporting is available. The system is fully integrated. As soon as a transaction is processed, the results are visible throughout the system, eg. a receipt will update the relevant ledger account, as well as the cash book. Accurate, up to date reports may be drawn at any time, there is not reason to wait for the end of the month before a report will be up to date. Flexible reports, for any overview, eg. daily, weekly, monthly, quarterly, annually or user defined are available. In addition, reports have default overviews, and can be customized by the user at run time.
- Question: How can the accuracy of reports be confirmed?
- Reports can be drawn showing only totals, totals by account or detail by account. Typically a report will include the relevant ledger account number, transaction date, transaction description, amount and a balance. In addition, these individual reports can be verified by comparing the transaction type, with its corresponding double-entry.
- Question: Do I need additional software to use DynamicLTA ?
- Yes. The good news is that simple data report browsing happens in the application, with no further software required. Generating external reports require additional software. The good news is that the additional software required is either free, or generally already present on the computer where DynamicLTA is installed. DynamicLTA generates all output reports as portable document format (.PDF) files. Any PDF Reader compatible with Adbode Reader 5.0+ will work with DynamicLTA . DynamicLTA PDF exports have been tested and works with Adobe Acrobat Reader and Foxit Reader.
- Most reports can also be exported as character separated value (.CSV) files. CSV files are text files and can be opened with any text editor, such as the Notepad application on Windows. However, the purpose of the CSV export is not to browse the text data. These CSV files can be opened with spreadsheet software such as Microsoft Excel, where the data can be manipulated, sorted and printed. DynamicLTA CSV exports have been tested and works with Microsoft Office Excel and OpenOffice Calc. If the correct software is installed, reports will automatically open when clicked.
- Question: How green is DynamicLTA?
- DynamicLTA uses one of the smallest and most reliable databases available today. In addition all reports generate as PDF documents, allowing the user to peruse and decide if printing to paper is really necessary. Most reports can also export to on-disk character separate value (.CSV) files, which can open in spreadsheet software. Generally, this obviates the need for hard-copy paper printouts. Certain reports must be printed for compliance purposes, but printing stacks of paper is not the DynamicLTA way. This makes DynamicLTA very green indeed.
The trade names Microsoft, Microsoft Windows, Microsoft Office, Microsoft Excel, Adobe, Foxit and Dropbox are registered copyright and trade marks of their respective owners. The names are used here to indicate compatibility only and does not indicate any other relationship, explicitly or otherwise.
If you have any additional questions, please do not hesitate to contact us.
-Dynamic
Annual Software License
DynamicLTA software is affordably licensed on an annual basis, and comes with a free student license.
Unique in the lawyers trust account market niche, it is designed to give #startup and small law firms a competitive edge in the regulated trust accounting environment.
Starting from a nominal USD 200.00 per year, it is the most cost effective accounting package for the lawyers trust account software niche market.
It does not matter if you are professionally registered as an advocate, attorney, lawyer, legal practitioner, debt collecting agent, solicitor or barrister – if you are responsible for maintaining a trust account, this is the place to start!
Due to local licensing agreements, methods of payment and local prices may differ.
Africa
Annual Licensing. Price as of 1 July 2016. Valid until 30 December 2016. Subject to change without prior notice. | ||
Country | Price | Additional info |
Botswana | BWP 2000.00 | Rate in Botswana Pula |
Ghana | GHS 785.00 | Rate in Ghanaian Cedis |
Kenya | KES 20000.00 | Rate in Kenyan Shilling |
Uganda | UGX 676500.00 | Rate in Ugandan Shilling |
Zimbabwe | USD 200.00 | Rate in US Dollar. Yes, this is correct. |
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Caribbean
Annual Licensing. Price as of 1 July 2016. Valid until 30 December 2016. Subject to change without prior notice. | ||
Country | Price | Additional info |
Jamaica | JMD 27500.00 | Rate in Jamaican Dollar |
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- Software is leased in terms of the EULA and never sold.
- The License covers the software only. Additional charges for support, training and peripheral services may be levied.
- FREE TRIAL and student versions are offered. No cash back or refunds will be given.
- License is not transferable.
- Please send an email confirming your licensing request.
See the Contact Us page for more information.
-Dynamic
www.DynamicLTA.com
LAWYERS TRUST ACCOUNT SOFTWARE
Complexity has and will maintain a strong fascination for many people. It is true that we live in a complex world and strive to solve inherently complex problems, which often do require complex mechanisms.
However, this should not diminish our desire for elegant solutions, which convince by their clarity and effectiveness. Simple, elegant solutions are more effective, but they are harder to find than complex ones, and they require more time which we too often believe to be unaffordable.
-Niklaus Wirth
Technology facilitates compliance. Dynamic Lawyers Trust Account software provides a simple solution in an otherwise complex market space.
Dynamic, an affordable, sophisticated lawyers trust accounting software solution, purpose-built for compliant integrated business & trust bookkeeping.
This software solution makes compliant client trust account record keeping easy for the legal practitioner. Cloud based, multi-user remote access serverless infrastructure allows collaboration from anywhere with an internet connection. #WorkFromAnywhere
#FinTech #LawyersTrustAccount #legaltech #software for #startup #SoloPractice #law
-Dynamic
Opening A New File: Matter Take On
How to Open a new client file on Dynamic follows a simple sequence.
The Menu item is located in File Index, under Open or Amend Client Ledger Accounts.
Once opened, files are immediately visible throughout the system.
For any new system, the first number will appear as #00000.
To activate the Take on Screen, press Tab or Enter, and watch the progress bar run as the screen is populated.
The image below shows the main features of the Take On Process.
Note that only the account number input and Save button controls are available. Save will only be available after selecting an account number.
The following sequence applies
- If you know the number of the account you want to use, type this into the ACNO box, press Tab or Enter. 1 above.
- Complete all the details. Click the Save button. 2 above.
- If you want to open a new matter for an existing client, start with an existing account number. Tab or Enter, wait for the screen to populate and then click the Save button. At this point a popup will appear “Do you want to open a new file?” If you click the No button, you may continue with an existing file. If you click Yes, the system will automatically supply the first available number. 3 above.
- Previous file information is cleared away.
- Where SetOff is anticipated, use a main control account for the client, and on each matter insert the main control account number into the Link No box. 4 above.
Additional notes
- The Reference box is used for the Client’s Reference. This can be a name or a number provided by the client.
- The Legacy # box refers to a previous number used by this firm for the same matter.
- The Department dropdown is used to distinguish different departments within the firm, often headed by lawyers. This selector can be used for internal administrative purposes.
- The File Type dropdown is used to distinguish the nature of the professional mandates on different files. This selector can be used for Compliance Reporting categorization.
- All new files start off with Status marked as “1 Active“
- The General Search icon is always available to search for existing files. The Advanced Search option includes Invoice numbers.
- The account number input 1 above and the Save button 2 above control all input.
[This post was revised on 9 January 2019]
-Dynamic
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