IOLTA client trust ledger example

An IOLTA client trust ledger records every dollar held in trust for one client or matter, with each deposit, each disbursement, and a running balance. All clients' money sits in one pooled IOLTA bank account, so the individual ledger is how a firm proves how much of that balance belongs to each client. The worked example below follows a personal injury matter from the first retainer through settlement to a zero balance.

A worked example, retainer to settlement

Client: Jane Doe  ·  Matter: Personal injury, car accident (2026-081)  ·  Trust account: IOLTA, account ending 4321

The matter closes at exactly zero, which is what you want when a client's funds have all been earned, disbursed, or paid out. Notice the balance never dips below zero at any line, and every entry names a specific reference and payee.

The rules every client ledger follows

• One ledger per client or matter. All client money sits in one pooled IOLTA account, but each client has a distinct ledger. The physical account is shared, the accounting is not.

• Every dollar is traceable. Each line ties to a specific client and matter, with a reference such as a check or wire number and a named payee.

• The balance never goes negative. A negative client ledger means you spent another client's money, which is commingling. The running balance stays at zero or above at all times.

• Earned fees leave promptly. When a fee is earned, it moves to the operating account, as the invoice 102 line shows. Firm money does not sit in trust.

• It feeds the three-way reconciliation. The sum of all client ledgers must equal the master trust ledger and the trust bank balance every month.

How it fits the bigger picture

A single client ledger is one leg of the monthly three-way reconciliation. If Jane Doe holds $17,550 mid-month, three other clients hold their own balances, and the four ledgers together should equal the master trust ledger and the trust bank statement to the cent. When they do not, the client ledgers are where you trace the difference. This is also the record a bar auditor asks for first: pick a client, and show every dollar from deposit to disbursement.

Download a client trust ledger template

You can use the layout above as a template. Give each client or matter its own ledger with the same columns: date, reference, description and payee, deposit, withdrawal, and running balance. A downloadable version of this ledger, with the worked example and a blank tab to copy, is available so you can start tracking immediately.

How Numetix keeps client ledgers clean

Numetix maintains a per-client trust ledger for every matter and reconciles it every month. No negative balances, earned fees moved on time, and the sum of client ledgers tied to the trust bank balance to the cent.

Numetix is a legal-specific service for small law firms of 3 to 20 attorneys. The client ledgers are kept audit-ready as part of the monthly close, with the books closed by the 15th, so the record a bar examiner asks for is already in order.

Frequently asked questions

What should a client trust ledger include?

The date, a reference such as a check or wire number, a description and payee, the deposit or withdrawal amount, and the running balance. The header names the client, the matter, and the trust account.

Can a client trust ledger go negative?

No. A negative balance means the firm used another client's money, which is commingling. The running balance stays at zero or above at all times.

How do client ledgers relate to the three-way reconciliation?

The sum of all client ledgers must equal the master trust ledger and the trust bank balance every month. Keeping each ledger accurate is what makes the three-way reconciliation tie out.

Want per-client trust ledgers kept clean and reconciled?One ledger per matter, no negative balances, three-way reconciliation every month, closed by the 15th.

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Numetix · AI-augmented bookkeeping and trust accounting for small law firms · numetix.ai