# Reconcile my law firm's IOLTA trust account

A step-by-step three-way trust account reconciliation that ties bank, trust ledger, and client ledgers, and flags anything a bar auditor would question.

- Topic: Finance & Accounting
- Framework: RTF
- Level: Standard
- Tags: Finance, Explain & Teach, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/reconcile-my-law-firm-s-iolta-trust-account

## Prompt

```text
Walk me through reconciling my law firm's client trust (IOLTA) account for the month and check my numbers.

**Month:** [MONTH AND YEAR]
**Bank statement ending balance:** [AMOUNT]
**Outstanding checks:** [LIST - number, payee, amount, date]
**Deposits in transit:** [LIST]
**Trust account general ledger (checkbook) balance:** [AMOUNT]
**Individual client ledger balances:** [PASTE - client, matter, balance]
**Unusual items this month:** [e.g. "bank fee charged to trust", "returned check", "wire from settlement"]
**State:** [STATE]

Do the following:
1. Compute the adjusted bank balance (statement balance minus outstanding checks plus deposits in transit).
2. Compare it with the trust general ledger balance and with the total of all client ledgers. Show all three numbers and whether they match.
3. If they do not match, list likely causes in order of probability: posting errors, transposed numbers, bank fees, uncleared deposits disbursed early, or a disbursement posted to the wrong client.
4. Flag compliance red flags: any negative client ledger balance; disbursements against uncleared funds; earned fees left in trust too long; firm money in trust beyond what covers bank fees (commingling); stale outstanding checks; and unidentified funds.
5. List the documentation to keep with this month's reconciliation and who should sign it.

Return: the three-way reconciliation table, a findings list, and corrective steps. Show every calculation. Trust accounting rules vary by state, and some issues must be reported to the bar; confirm with my state's trust account rules and a qualified accountant or ethics counsel.
```

## What to fill in

- MONTH AND YEAR
- AMOUNT
- LIST - number, payee, amount, date
- LIST
- PASTE - client, matter, balance
- STATE

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