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C.   Current Accounting System

A description of the current accounting system and files held is necessary in order to determine the firm's needs and the accounting system to be considered. For instance, the firm may decide to buy only one accounting module such as Debtors or General Ledger.

The following is a rough example of an accounting system:

Accounting records and files maintained:

Ledgers and Journals

Files

General LedgerClient files Current
General JournalClient files Completed
Trust Account LedgerAccounting files
Cash Book GeneralStaff files
Cash Book Trust AccountBarrister files
Client Ledger General source documents
Income JournalTrust Account source documents
Outlays JournalBest Practice Files
Petty Cash RecordsProbono Files
Payroll (wages) bookOverhead Costs file

 

 

Income

The business operates on a cash and accrual basis. Income is generally received on finalization of the service provided either to be deducted from settlement monies or invoiced on a 30 days credit basis.  Some outlays are paid for in advance and deposited into the trust account.



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