Your trust ledger is not a separate application.
Operating and trust accounting are part of the practice system, not an accounting package you reconcile against it at month end. A retainer paid by card lands in that client’s trust ledger. The balance shows on the matter. An invoice posts to receivables when it is issued. Nothing has to be carried across by hand, because there is nowhere to carry it to.
- Quick answer
- Does Sapphire Legal do trust accounting?
- Yes. Sapphire Legal keeps the firm’s operating and trust ledgers inside the same system as its matters, so client money is not tracked in a second application. Retainers collected through LawPay post straight to that client’s trust ledger, the client’s trust balance is visible on the matter itself, and invoices post to receivables as they are issued. Trust money follows the rules that make client accounts auditable: a ledger is never allowed to go negative, a deposit cannot be spent until it has cleared the bank, and a transaction is never edited or deleted — a mistake is corrected by a reversing entry that points at the original, so the history stays intact. A three-way reconciliation compares the bank balance adjusted for items in transit, the firm’s trust cash book, and the sum of every client ledger; signing off a period locks it and only succeeds when all three agree. The ledger supports the US IOLTA, Canadian law society, Australian and UK SRA client-account regimes.
Most firms run two systems and reconcile the gap.
The matter lives in the practice system and the money lives in the accounting package, so somebody spends the end of every month making the two agree. That work exists only because of the seam.
A retainer arrives where it belongs
A client pays a retainer through LawPay and it posts to that client’s trust ledger — not to an inbox, a spreadsheet, or a bookkeeper’s queue. The money and the matter were never in different places, so nothing has to be matched up afterwards.
The balance is on the matter
Open the matter and the client’s trust balance is there, because it is the same record. Nobody has to ask the bookkeeper what is left before deciding whether to do more work.
Invoices land in receivables as they are issued
Issuing an invoice posts it to receivables at that moment, rather than at whatever point someone next exports the billing. What the books say and what the practice did are the same thing.
Earned fees move against a delivered invoice
Moving fees from trust to the operating account is tied to an invoice that has actually been delivered. The firm cannot quietly take earned-looking money out of client funds before it has billed for it — the same rule that holds a settlement fee until it is invoiced.
The bank, the cash book and every client ledger.
This is the part that gets a firm into trouble when it is done badly, so it is worth being specific about what the software actually checks.
A reconciliation compares three figures that must all agree: the bank statement balance adjusted for deposits in transit and payments not yet presented, the firm’s trust cash book, and the sum of every individual client ledger. Where any two disagree, the difference is named and quantified rather than left for you to find. A negative client ledger is reported as a failure even when the three totals happen to agree, because one client’s money covering another’s shortfall is exactly what the totals can hide. Signing off a period locks it — and the sign-off only succeeds when the reconciliation balances.
- The bank balance is adjusted for items in transit, not compared raw
- Any difference is named and quantified, not just flagged
- A negative client ledger fails even when the totals agree
- Sign-off locks the period, and only works when it balances
- A listing of client balances can be produced as at any date
Client money is handled differently from the firm’s own.
These are properties of the ledger rather than habits of the person using it, which is the only version worth relying on.
Nothing is ever edited or deleted
A mistake is corrected by a reversing entry that points at the transaction it undoes, and the original stays on the record marked as reversed. There is no version of the history in which the error simply was not there — which is the version an auditor asks about.
A deposit is not spendable until it clears
Available funds mean cleared funds. A firm cannot pay out against a deposit that is still a cheque in the post, which is how one client ends up unknowingly funding another’s disbursement.
A client ledger cannot go negative
Paying out more than a client holds is refused rather than recorded. The shortfall that a three-way reconciliation is supposed to catch at month end is prevented at the moment it would be created.
No floating point, anywhere
Every amount is a whole number of cents or pence. The rounding drift that makes a ledger disagree with itself by a few cents over a few thousand transactions is not a thing that can happen here.
IOLTA, law society trust, SRA client account, Australian trust.
Client money is held under different rules and different names depending on where a firm practises, and the ledger carries all four: IOLTA in the United States, law society trust accounts in Canada, client accounts under the SRA in the United Kingdom, and Australian trust accounts. Account labels and reconciliation cadence come preset per regime and are editable per trust account.
Those presets are a starting point, not legal advice and not a statement of what any regulator requires. Reconciliation frequency, record-keeping and reporting obligations are set by your own regulator, and a firm should check its rule against them. What the software guarantees is that the arithmetic is right, the history is intact, and a period cannot be signed off while it is out of balance.
What firms ask about Books.
Do we still need separate accounting software?
What happens when a reconciliation does not balance?
Can we correct a transaction that was entered wrongly?
Does this keep us compliant with our bar’s trust rules?
How does a settlement pay out?
Bring a real reconciliation.
The honest test of trust accounting software is a month that did not balance the first time. Bring one and watch where it says the difference is.