Catch-Up Bookkeeping for Law Firms

When a firm falls behind on bookkeeping, the goal is simple: rebuild accurate records and restore financial clarity. For law firms, that process carries a few extra steps because trust accounting and client costs often span multiple accounts and reporting systems. At Chief Bookkeeping Officer, we specialize in bringing law firms current, rebuilding both operational and IOLTA records from the ground up.

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Rebuilding the Operational Books

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Historical operational bookkeeping is straightforward. With access to past bank statements, credit card statements, and payroll reports, we can reconstruct your books from any point in time. Each transaction is categorized, reconciled, and tied back to supporting documentation so that the rebuilt financials reflect the true activity of your firm. Once complete, your QuickBooks Online file operates just like a current set of books, with proper reporting and ready-to-use financial data.

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Handling the IOLTA Side

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Trust accounting adds another layer to the catch-up process. While the operational books rely on standard financial documents, IOLTA reconciliation requires additional details: disbursement records, client cost activity, and matter-specific transactions. These details typically come from your practice management software or from trust bank records. Using that information, we prepare client ledgers, tie them to the IOLTA liability balance, and reconcile each period accurately.

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Working by Full Fiscal Years

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In most cases, the best way to complete a catch-up project is to rebuild full fiscal years rather than partial months. This approach allows us to start from firm opening balances that match the prior year’s tax return, eliminating uncertainty from mid-year gaps or unsupported IOLTA balances. It gives both your firm and your CPA a clean foundation for tax filings and future reporting.

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Deliverables and Turnaround

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Every law firm catch-up project includes:

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• A fully functional QuickBooks Online account reflecting historical data

• Monthly financial reports (Profit & Loss and Balance Sheet) for each month of the catch-up period

• Year-end reports prepared for your CPA or tax preparer

• Optional IOLTA 3-way reconciliations covering the same time period

• Post-completion transition to ongoing monthly bookkeeping

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Turnaround for one full fiscal year typically averages about two months, depending on the volume of activity and whether IOLTA reconciliations are included.

From Catch-Up to Continuity

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Once your books are fully caught up, we shift to maintaining them monthly so they stay accurate going forward. That continuity is what keeps your financials dependable and your firm audit-ready at all times.

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Partner with one of our CBOs and let our team handle your firm’s bookkeeping and IOLTA 3-way reconciliation each month so you can stay focused on your clients. Schedule a consultation below or call us at 213-286-7502.