Pursuant to By-law 9, s.9.:
9. (1) A licensee may withdraw from a trust account only the following money:
1. Money properly required for payment to a client or to a person on behalf of a client.
2. Money required to reimburse the licensee for money properly expended on behalf of a client or for expenses properly incurred on behalf of a client.
3. Money properly required for or toward payment of fees for services performed by the licensee for which a billing has been delivered.
4. Money that is directly transferred into another trust account and held on behalf of a client.
5. Money that under this Part should not have been paid into a trust account but was through inadvertence paid into a trust account.
This week we are discussing number 2 on the above list. PCLaw can be set to “Allow Trust transfers for WIP” in Options - System Settings – Banking tab.
For example, when you pay the Minister of Finance for a court cost with a general cheque, you are permitted to transfer this amount from trust to reimburse the general account.
When you review the client ledger, you should find the disbursement and a general retainer for the same amount.
Billing – be sure retainers are selected on “Other” tab, so that the general retainer receipt and the disbursement cancel each other out.
Be aware that expense recovery items are sometimes not true disbursements. For example, photocopies may cost you 2 cents but you bill the client 10 cents. This mark-up represents income, and should not be paid from trust until billed.
As always, I invite your comments and suggestions for future post topics. Next Week – PCLaw and Can. Deposit Insurance Corporation.