Trust & IOLTA accounting basics

Trust accounting is available on Professional plans and above, as part of Mylo Billing. It’s built around the rule every bar association enforces: client money is not your money until it’s earned, and you must be able to prove it.

The basics

• Per-client trust ledgers. Every client’s trust balance is tracked separately. The system will not let one client’s matter spend another client’s funds.
• Deposits. Record retainers and settlement funds as trust deposits against the right client and matter.
• Disbursements. Paying an invoice from trust, refunding a client, or disbursing settlement proceeds each create a proper ledger entry with a paper trail.
• Safeguards. The system blocks the classic errors — overdrawing a client’s trust balance, or applying trust funds to another client’s invoice.

Paying invoices from trust

When an invoice is due and the client has trust funds, you can apply trust to the invoice. This creates the disbursement entry, moves earned fees to your operating side, and leaves the client’s remaining balance intact and visible.

Reconciliation

Your trust bank account should reconcile against the sum of client ledgers. If your firm uses QuickBooks, see Connecting QuickBooks — trust balances sync so your accountant sees the same numbers you do. We recommend reconciling monthly; most bars require no less than quarterly.

Important

Mylo Billing is a tool for keeping accurate trust records — it does not replace your firm’s obligation to know and follow your jurisdiction’s trust rules. When in doubt, check your bar’s rules or consult ethics counsel.

If the numbers don’t match

Trust discrepancies are the one billing issue you should never sit on. Contact support with the client and matter involved, and mark the request as a billing issue — trust questions are prioritized and reviewed by a human on our team.