Running a practice
Trust account records for a new sole practitioner
· 6 min read
Opening a practice means opening a trust account and keeping a specific set of books from day one. Here is the minimum, and the order to set it up in.
Start the records before the first deposit
The books have to run from the first dollar, and retrofitting them is the single most common early mistake. The set-up is genuinely small — but it has to exist before money arrives, not after the first busy month.
The obligation is to keep records as events happen. A trust account opened in March with a ledger begun in June has a gap that no amount of later diligence closes.
The minimum set
- A trust receipts journal and a trust disbursements journal.
- A separate trust ledger for every client whose money you hold.
- A monthly three-way comparison of bank, ledger control and client balances.
- A fees journal, so every transfer from trust ties to a delivered bill.
- Client identification and verification records under By-Law 7.1.
Whether this lives in software or a spreadsheet matters far less than whether it is current. A maintained spreadsheet is compliant; an abandoned system is not.
The rules worth internalising early
- Client money goes to trust, and does not become yours until you have billed for it. Transferring first and billing afterwards is the wrong order even when the fee is plainly earned.
- Trust money is never used to cover a shortfall on another file, however briefly.
- Cash has a limit, and it is low. Above it, the answer is a different payment method.
- Authorising a withdrawal from trust is a licensee's responsibility and cannot be delegated away.
A workable first month
Open the trust account and the general account separately. Set a fixed reconciliation date and put it in the calendar as a recurring commitment rather than a task. Decide where source documents will live before you have any, and file the first bank statement there.
If you are unsure whether a particular receipt belongs in trust, the conservative answer is usually the right one: deposit to trust and move it out once you have billed. Money that sat in trust slightly too long is a far smaller problem than money that never went there.
Sources
Read on August 30, 2026. Each link goes to the original text, not a summary — check it for the current wording.
- By-Law 9 — Financial transactions and records — the trust-accounting rulebookLaw Society of Ontario — By-Law 9
- By-Law 9, s. 18(8) — Monthly three-way trust comparison, prepared for each trust accountLaw Society of Ontario — By-Law 9
- By-Law 9, s. 12 — Trust withdrawals must be authorized by a licenseeLaw Society of Ontario — By-Law 9
- By-Law 7.1 — Client identification, verification, and ongoing monitoring (KYC)Law Society of Ontario — By-Law 7.1
Related
- Three-way trust reconciliation, explained
Three numbers have to agree every month: the bank, the trust ledger control, and the sum of client balances. Here is what each one is and why they drift apart.
- What an LSO spot audit actually looks at
A spot audit is a records review, not an investigation. Here is what the Law Society asks for, in the order it usually asks — and what a clean answer looks like.
- The Ontario firm's annual compliance calendar
Three recurring obligations carry most of a small firm's regulatory year, and a fourth arrived in 2025. What falls due, when, and what missing it actually costs.
- How long trust records have to be kept
Most trust records are kept ten years plus the current year, one is six, and all of them must be current and producible on request — not merely stored.
Intaklo keeps these records for you
Trust ledgers, monthly three-way reconciliation and an audit-ready binder, built for Ontario sole practitioners and small firms.
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