DynamicLTA uses both a pre-defined Chart of Accounts and a pre-defined set of transaction types.

The following explains some of the concepts used:

1. Client gives us a deposit (retainer) to be kept on trust until work is done.
2. Professional work is done.
3. Funds transferred from Trust to Business.

In order to fully and accurately capture all these events and obtain final ledger reports which reliably indicate the full audit trial, each transaction has to be isolated.  Each distinct transaction has to be captured separately.  At least the following must be captured:

1. Trust Receipt. Deposit belongs in the trust. A trust receipt is issued and processed as such, updating the client trust ledger and the trust cash book. Credit the ledger, debit the trust cash book.
2. Business Fee.  The trust is not subject to fee charges.  Work done must be charged to the client’s business account.  Debit the client business ledger and credit the revenue account used for Professional Fees.  Simply transferring funds from the trust account and calling it a “Fee” does not make it so.  
3. Transfer. There are two options when it comes to transferring money from trust to business.
   1. Individual transfers. On the client ledger account, process the trust payment out to the business account.  Debit client trust ledger and credit the trust cash book.  Now receive the money in the business account: business receipt.  Credit the client business ledger and debit the business cash book.  This works well for few accounts and relatively large sums. but becomes an administrative burden when managing many accounts.  This method is generally discouraged.
   2. Bulk Transfer Procedure. Use the Dynamic transfer journal option.  This will generate a “Transfer Journal” transaction on each eligible ledger, debiting the trust ledger and simultaneously crediting the business ledger. Individual ledger entries are allocated.  This ledger entry reduces the trust creditors, but does not affect the trust cash book.  This creates a global difference between the total trust cash book balance and the client trust ledger balance.  The difference is then processed as a single bulk bank payment.  Process a transfer payment against a transfer control account: debit trust on transfer control ledger and credit the trust cash book.  Directly after credit business on the same transfer control ledger and debit the business cash book.  This method is recommended.  See more below.
4. The clients ledger (combined trust and business) shows the full audit trial of all transactions processed.
5. Each individual transaction has now been processed and is clearly distinguishable from other transactions.

The Bulk Transfer Procedure is is shown in the images below.

 

The Bulk Transfer Procedure discussed above is also discussed elsewhere.  From the top down, the main features are as follows:

• The Bulk Transfer Control account (normally #99900) reflects the amounts paid out from trust and received into the business.  The same amounts should reflect on the trust and business cash books and bank statements.  Control in place? Check
• The Transfer Journal listing identifies each individual ledger and the exact amount debited or credited at that time.  The total here should be what is paid between the cash books. Total transfer valued determined? Check. Individual ledgers identified? Check.  Exact amounts to transfer determined? Check.
• The Ledger History Report on any given client ledger will reflect the discrete transactions and indicate how Dynamic determined the transferable amount. Compliance achieved? Check.

Please note that on Dynamic, as on all bookkeeping systems, transactions should be entered accurately and as up-to-date as possible.  Bank reconciliations should be done frequently, preferably up to current month.  No transfer system, manual or otherwise, can be accurate where the underlying transactions or account management procedures are not accurate or up to date.

-Dynamic