Trust errors tend to increase when multiple trust bank accounts are used, and when clients have multiple matters. Within this category of trust errors, there are 3 errors that are commonly found:
- simple trust posting errors, usually involving posting the wrong amount or posting to the wrong matter. Just locate the error and correct the entry.
- negative matter trust balances – sometimes the client has sufficient trust funds, but they are not distributed to the various matters as needed to eliminate the negative balances. These errors will reveal themselves when you compare your trust bank reconciliation to your client trust listing.
- depositing funds or posting to the wrong trust bank account is another common mistake when multiple accounts are used. Simply viewing the client ledger or the client trust listing does not easily draw your attention to this error. Instead, you must run separate client trust listings for each bank account. You may need to transfer funds to correct this error.
As always, I invite your comments and suggestions for future post topics. Next week – Accounts Receivable Errors.