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|
|General Ledger||Client files – Current|
|General Journal||Client files – Completed
|Trust Account Ledger||Accounting files|
|Cash Book – General||Staff files|
|Cash Book – Trust Account||Barrister files|
|Client Ledger ||General source documents
|Income Journal||Trust Account source documents|
|Outlays Journal||Best Practice Files
|Petty Cash Records||Probono Files|
|Payroll (wages) book||Overhead Costs file
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.