Record IOLTA Interest Deposits & Withdrawals

Ensuring accurate reconciliation of your account statements involves tracking the transactions related to Interest on Lawyer Trust Accounts (IOLTA) if your bank credits interest to your trust account and it reflects on your statements.

Set up IOLTA Interest Tracking

To set up IOLTA interest tracking:

1. From the left navigation panel, click Banking.
2. On the Bank screen, single-click your trust bank to highlight it.
3. Click on the 3 dots to the right of the trust bank, and click Edit.
4. On the Edit Bank screen, at the bottom of the Advanced Settings section, check the Interest Allowed box.
5. Click Save.
6. All trust account funds must be attributed to a matter, so create a matter solely for tracking IOLTA transactions. We recommend naming the matter IOLTA Interest so its purpose is clear.
   Note: If you have more than one trust bank, we recommend you create and associate a matter with each trust account, naming them IOLTA Interest – Bank Name.
   

Record an IOLTA Interest Deposit

When you receive interest in your IOLTA account, you will want to record that interest deposit under its corresponding IOLTA interest matter for accounting purposes.

To record your IOLTA interest deposit:

1. From the left navigation panel, click Matters.
2. Double-click on the selected matter, and scroll down to view the matter details.
3. Click on the Banking tab.
4. Click the Trust Transaction icon and from the drop-down menu, select Deposit.
   
5. The Matters Trust Deposit screen opens, displaying your IOLTA Interest matter in the Client Matter field atop the screen.
6. In the Date field, use the drop-down to click the date the interest payment was posted.
7. In the Amount field, enter the interest amount.
8. The Type field will default to Deposit.
9. In the Method field choose Interest.
10. In the Payor field, confirm your bank’s IOLTA interest matter account name displayed.
11. From the Memo field’s drop-down, click IOLTA Interest Deposit.
12. In the top right corner, click Save. The system records your interest deposit and updates the matter’s ledger balance.

Record an IOLTA Interest Withdrawal

When you are ready to withdraw the interest, you will want to record that withdrawal in your administrative interest matter.

Note: To prevent ledger overdrafts, it’s prohibited for interest withdrawals to exceed the interest received.

To record an IOLTA interest withdrawal:

1. From the left navigation panel, click Matters.
2. Double-click on the selected matter, and scroll down to view the matter details.
3. Click on the Banking tab.
4. Click the Trust Transaction icon and from the drop-down menu, select Withdrawal.
   The Matter’s Trust Withdrawal screen opens.
5. From the Date field’s drop-down, click your interest withdrawal date.
6. In the Amount field, enter the withdrawal amount.
7. From the Type field’s drop-down, click Adjustment Out.
8. The Method field populates with Internal Operation.
9. In the From field, enter the payee’s name.
10. From the Memo field’s drop-down, click IOLTA Interest Withdrawal.
11. In the lower right corner, click Save. Your interest matter’s ledger updates with your interest withdrawal.