Our Top 3 Trust Accounting Systems

As we continue our series on trust accounting, it’s crucial for us to look at the different systems that allow us to manage these funds. While there are several out there, we’ve narrowed them down to our top three picks – and why. Our picks are not solely based on the system’s ability to manage trust accounting, but a combination of all their features.

NO. 3 – QuickBooks Online (QBO)

I know, I know – QBO is not a trust accounting system! It doesn’t have any out-of-the-box features to support such tracking. So how did it make it on to our top three? Because QBO is a fan favorite accounting system for small to mid-sized businesses, that’s how!

To use this system for trust accounting, I recommend checking out our next post on QBO Trust Management.

Pros:

  • Easy to use
  • Inexpensive (flat monthly fee and not per user)
  • Clients have access to their invoices, can make payments online and can send messages inquiring on their account
  • It’s an all-in-one financial system and the can be used for all payroll and financial management needs, including trust accounting
  • Easily connect with your outsourced financial management firm

Cons:

  • Currently doesn’t allow the use of external credit card merchants when clients pay online
  • Trust balances have to be manually entered on invoices and client statements
  • No full-proof way to prevent overdrawing on a client’s trust account
  • Greater risk for human error when used by those not in the finance professions
  • Trust allocations have to be entered manually

After seeing the cons, I’m sure you’re still wondering why in the world we would put QBO on our Top 3. This a great system for solo attorneys and small firms, or firms that require very little trust accounting.

We have also found it very beneficial (and life-saving) to use QBO for trust accounting in conjunction with an outside legal billing system. Stay tuned for future articles in this series to find out why and how it works!

NO. 2 – Clio

For those of you that use law firm management systems, I’m certain you’re baffled by how we could possibly rank this number two and not one. It was a close call, but read further and you’ll see some of our deal breakers.

Pros:

  • All-in-one practice management (billing, trust accounting, document management, scheduling, communications)
  • Approval process for billing
  • Inability to overdraw a client’s trust account
  • Ability to apply a trust deposit at the client or matter level
  • One-click trust allocations
  • Tons of ways to customize and add fields to suit your practice’s needs
  • Open API
  • Integration with LawPay including client payment plans and ability to take client payments from within Clio
  • Helpful and friendly customer support

Cons:

  • Clio payments can glitch from time to time causing inaccurate allocations to client invoices
  • Integration with accounting systems is very limited and payments are brought over as individual allocations, not the actual payment itself
  • Invoices aren’t automatically sent upon creation and require another step to do so
  • Requires a lot of work arounds when correcting human errors or client refunds
  • Can’t create a credit note outside of an invoice
  • Interest invoices do not populate on the client’s account
  • Limited reporting, especially the trust accounting reporting
  • Pricey and charged per user

In the grand scheme of things, Clio is amazing. There are just so many things you can accomplish with this system! However, as we use this with some our clients, we know all too well the problems Clio creates as well. When the cons include financial inaccuracies, we just can’t look past it.

We have learned some great work-arounds for the problems we have with Clio. Stay tuned for an upcoming post on just that!

NO. 1 –TimeSolv

I like to call this our diamond in the rough. It’s not the most widely known system, nor is it flashy with a ton of bells and whistles. However, this bad boy does exactly what we need it to do!

Pros:

  • All-in-one practice management (billing, trust accounting, document management, scheduling, communications)
  • Inability to overdraw client trust accounts
  • Able to pay multiple client matters from the client’s trust without transferring funds
  • Section dedicated to just trust accounting with easy to use functions (including allocations)
  • Able to create credit notes on an account without applying immediately
  • Reporting gives us everything we need and then some
  • Integrates with LawPay
  • Open API
  • Reasonably priced
  • Small team at customer service so it’s more personalized (you’ll love Ron!)

Cons:

  • Integration with QBO is limited
  • Can’t allocate all trust payments at once
  • System can run slow at times
  • Once you deactivate a matter it doesn’t show up on the payments or trust screens

The accuracy in this system is unbeatable. It’s not super pretty and looks like a standard database, but it gets the job done. Your financial team will adore you for using this trust accounting system! What’s better is you get a full 30-day trial.

Keep in mind that every firm has their own preferences, needs and quirks. As such, the systems we described here may not work for everyone. For a free analysis of your firm and needs, contact MVO Resources today!