Reconciling Escrow Accounts

A New York law firm faced a challenge where their disgruntled CFO quit without any notice. Legal Resources was asked to step into the position until they could find a suitable replacement and look for ways to make improvements.

With a background as a CPA, we created and implemented a plan to study all accounting employees and procedures. We quickly discovered that most of their escrow accounts were not reconciled for the past four years. This was very serious as lawyers could lose their license if escrows are unreconciled (even if by one cent).

In addition to all CFO functions, the project led us to create employee manuals for all accounting staff and review their productivity. We also discovered discrepancies in billing and unnecessary cumbersome procedures in various tasks throughout the accounting department.

Based on the data gathered, Whitman recommended the following:
 

• Follow new procedures around Escrow Accounts to ensure that someone would monitor them going forward.
• Detailed CFO, Billing and Accounts Payable Employee Manuals were created to enable temporary employees to come in and:
  • “Hit the ground running’ in case a key employee was to unexpectedly leave.
  • Stop wasting time with outdated procedures.