In part 1 of the blog series, “Credit Card Acceptance for Law Firms”, I highlighted the two areas of concern when it comes to law firms accepting credit cards for payment. In any other business, credit cards are a complete no brainer. For law firms this is unfortunately not the case because of the unique regulations and penalties associated with a law firm’s finances.
Concerns surrounding the acceptance of credit cards by law firms can be divided into two different classifications. Concerns can be both internal and external. In part 2 of this series I will discuss the external concerns associated with the acceptance of credit cards by law firms.
IOLTA Trust Fund Accounting & Credit Cards
The external concerns related to law firms accepting credit cards has everything to do with their credit card merchant. It is imperative that law firms select a merchant that is specific to the legal industry, like LawPay.
The reason being that law firms deal with an entirely separate set of regulations regarding their finances, and falling out of compliance could very well result in the disbarment of your firm.
When dealing with IOLTA trust fund accounting and the acceptance of credit cards your firm needs to:
- Ensure that there is no commingling of trust and operating accounts
- All fees must be accessed to an operating account and not a trust account
- Chargebacks must take place in operating accounts and not trust accounts
- For efficiency, all fees should be removed at month’s end
The fact that IOLTA trust fund accounting is difficult for any firm to navigate is nothing new. The idea that accepting credit cards as a law firm is difficult due to trust fund accounting certainly isn’t breaking news either. However, it is phenomenal news that there is now a solution available that can make the convenience of paying with a credit card a reality for your firm’s clients.
CosmoLex is the only legal practice management software to bring billing, accounting, and credit card processing systems together in one place by integrating with the legal specific credit card payment processing solution, LawPay. This makes it easy for your firm to reconcile multiple systems and eliminate bookkeeping errors that could result in lack of compliance and ultimately disbarment. All of this while making payment from your clients more convenient and simple through the use of credit cards.
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