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November 11, 2025
November IOLTA Compliance: Prepping for Year-End Audits
You don’t want your trust account to become a liability at the end of the year.
That’s why November is your final chance to ensure your IOLTA accounts are reconciled, documented, and audit-ready—especially if you practice in a state like California, Florida, Michigan, or Massachusetts where compliance lapses can trigger bar investigations or even suspension.
If you’re an attorney managing client funds, here’s what your firm should be doing right now to close Q4 strong and stay above reproach in the eyes of your state bar.
Why November Is Not Too Early (or Too Late)
State bar audits don’t always come with advance warning. But they do come with serious consequences.
Whether your firm is preparing for a random audit, a triggered complaint, or simply staying ready to meet annual certification requirements, November is your last full month to:
- Catch up on monthly reconciliations
- Address bookkeeping discrepancies
- Organize supporting documents for client balances
- Verify internal controls are in place
If you’re hoping to finish the year without the stress of emergency cleanups, this is the moment to get your trust account systems in order. Go to FixMyIOLTA.com and book your free consultation!
Your Year-End IOLTA Reconciliation Checklist
At a minimum, you should have already completed all trust account reconciliations through October 31. Now, use this checklist to prep for November and your year-end compliance file:
✅ Perform your November 3-way reconciliation
- Reconcile your trust account bank statement
- Match the book balance in your trust ledger
- Compare to your client-specific ledger balances
- If any of these numbers don’t align? You need to investigate immediately.
✅ Ensure your client ledgers are up to date
Every dollar in your IOLTA must be traceable to a specific client or matter. No general “trust funds” balances without client breakdowns.
✅ Check for stale or uncashed checks
If client refunds or disbursements haven’t cleared, follow up—and document your outreach. Bar rules often require escheatment or specific handling after a time limit.
✅ Review all deposits
Make sure funds received were credited to the correct client and matter—and that you didn’t deposit earned fees or personal funds.
✅ Organize supporting documents
Keep digital or physical copies of:
- Deposit slips
- Signed client fee agreements
- Disbursement authorizations
- Monthly reconciliation reports
✅ Verify internal controls
Who approves disbursements? Who reconciles the account? Your procedures should demonstrate separation of duties—even in solo firms.
Best Practices: What to Document Before December
Many lawyers assume documentation only matters if there’s an audit. But the smartest firms treat documentation as protection.
Here’s what to keep updated:
- Monthly Reconciliation Reports — Store at least 5 years (per most state bars).
- Client Ledger Reports — Especially for clients with active funds.
- Bank Statements — Secure PDF versions every month.
- Check Registers — Chronological listing of all trust activity.
- Procedures Manual (if possible) — Outline how your firm handles trust accounting.
If your bar asks for an audit package, you want to be able to respond within hours—not weeks.
What Happens If You’re Not Ready?
Bar associations take IOLTA compliance seriously. Real consequences include:
- State Bar of California — Public or private reprovals for failing to reconcile monthly or maintain proper ledgers.
- Florida Bar — Disbarment in extreme cases of commingling or misuse of client funds.
- Massachusetts BBO — Suspensions for failure to maintain 3-way reconciliations or unauthorized disbursements.
- Michigan Attorney Grievance Commission — Trust accounting violations often result in probation, reprimand, or disbarment.
If you’re in a multistate practice, don’t assume compliance in one state automatically satisfies another’s rules. Each state has specific recordkeeping timelines and reconciliation requirements.
Need Help Fixing a Mess?
It’s not too late—but time is running out.
If you’ve skipped reconciliations or never even seen a 3-way trust report, you’re not alone. But don’t wait until a random audit exposes the problem.
At Prestige Accounting & Consulting, we help law firms restore, maintain, and automate their trust compliance systems—so they’re ready for anything.
✅ We’ll help you catch up on reconciliations
✅ Organize your records into audit-ready folders
✅ Implement easy-to-follow workflows for monthly compliance
Take the Stress Off Your Plate
Book a free consultation to get your trust account reviewed and fixed before year-end:
