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