The Importance of Bank Reconciliations
Bank reconciliations must be performed on a monthly basis — and it doesn’t hurt to do them more frequently. Law firms that do not perform at least monthly reconciliations find this out the hard way. A deposit left uncleared by the bank or other bank mistakes can easily overdraw operating or trust accounts. This is a disaster if it goes unnoticed for long. Remember, ALL bank accounts (Trust, General and Credit Cards) must be reconciled monthly — and books locked — to prevent accidental future editing.
Import Bank/Credit Card Transactions
CosmoLex lets you import electronic bank/credit card statements for automated data entry. This feature is often used to import monthly credit card transactions, as credit card charges are normally only entered after the statement becomes available. Built-in, adaptive mapping rules can correct payee names and learn the chart of account(s). You can even post matter-cost related transactions while importing, thus preventing a major source of missed expense entries.
Bank Reconciliations Auditors Can Trust
The bank reconciliation is one of the most important aspects of law office accounting. Monthly bank reconciliation reports are mandatory. And they may help you locate mistakes made by you or your bank. These are also the first set of reports lawyers are asked for during a spot audit. To speed up the bank reconciliation process in CosmoLex, you can import electronic bank statement data (QBO format) and auto-reconcile transactions. (Or you can reconcile manually.) Additionally, you can go back to any prior month, look at a snapshot of transactions exactly the way they were, and reprint previous reports.
Minimize Accidental Post-Reconciliation Edits
Beware of bank reconciliation methods offered by generic business accounting programs! Most of them do not prevent accidental edits of transactions within the reconciled timeframe or all reprint of prior reconciled reports. CosmoLex is designed specifically for law firms and their unique business & trust accounting requirements mandated by your Law Society. CosmoLex automatically locks your trust books after a bank reconciliation is completed — preventing accidental revisions & providing added protection against a rogue employee.
Compliant Trust Account 3-Way Reconciliation
Three-way reconciliation reports are an important feature unique to law firm trust accounts. CosmoLex will produce these critical documents for you in one click.
Our three-way reconciliation report consists of following components & ties these balances together while accounting for deposits and cheques in transit:
- Bank Balance
- Book Balance
- Client Ledger Balance