While nobody likes compliance audits, they are a fact of life when you deal with sensitive areas such as trust account administration. The secret to surviving an audit is the kind of comprehensive and automatic documentation you get from the right trust accounting software.
CosmoLex is the only cloud-based legal billing program on the market today that has 100% integrated trust account functions that can save the save the day during a compliance review of your trust accounting records.
Accurate Trust Account Records Are Crucial
You cannot afford to manage retainers, court settlements and other trust fund monies haphazardly. You must track every penny of a matter’s trust and show that funds from a given trust account have never been used for another matter, even temporarily. Borrowing funds from a trust is illegal in every state and is tantamount to stealing someone’s wallet with the intent of giving it back later.
If you manage trusts, you will be audited eventually. The auditor will go over your books with a critical eye. Even if you made a one-cent mistake three years ago, you can bet the auditor will find it. And, that’s why you need trust fund software that works directly with your billing software and updates transactions automatically.
Trust Accounts Are Frozen until an Audit is Complete
One common mistake attorneys make is to rush to update their books once an audit is declared. Although the intent is to give an auditor complete information, in reality is this is fraud. Your books must freeze until the audit is over. Attempting to fix things will simply upset the auditor. CosmoLex’s automatic audit log demonstrates to an auditor not only what entries are in your records, but also when the entries were made and verifies that all changes predate the audit.
Contrary to popular belief, auditors aren’t looking for perfect books. They are looking for a good audit trail. Documentation shows your intent, demonstrating an error is an honest mistake rather than deliberate malfeasance. Remember when your high school teachers kept insisting you show your math work? It’s the same with an audit. Sloppy books with a good audit trail are better than perfect books with no documentation.
Stay Prepared for Trust Audits
Use CosmoLex legal billing software integrated every trust management function you need. The automatic documentation and audit log will go a long way in avoiding the stress associated with audits.