Cash Receipts and Refunds, Books and Records


If I accept cash in accordance with the By-Law, are there any additional record keeping or reporting requirements?
Is there a specific format for the additional records for cash receipts? Is there a precedent?
Do the additional record keeping requirements apply to the receipt of any amount of cash?
How long must the additional records for cash receipts be maintained?
What if the person providing the cash refuses to sign the receipt as required by the By-Law? Am I then prohibited from accepting the cash?
What actions constitute reasonable efforts to obtain the signature of the person providing the cash?
Can I refuse to accept cash from my client or others?
If I choose to never accept cash, are there any changes to my record keeping or reporting requirements?
The original payment I received was in cash and now a refund is required. How do I refund money in cash?


Q:If I accept cash in accordance with the By-Law, are there any additional record keeping or reporting requirements?

A: Yes. A lawyer or paralegal who chooses to accept cash must maintain a book of duplicate receipts where each receipt identifies
• the date on which the cash is received
• the person from whom the cash is received
• the amount of cash received
• the client for whom the cash is received, and
• any file number in respect of which the cash is received

The receipt must also contain the signature of the lawyer, paralegal or person authorized by him or her to receive cash and the signature of the person from whom the cash is received [By-Law 9, s. 19]. Also, you must record the method of receipt of funds (i.e. that it was provided in cash)  in either the trust receipts or general receipts journal, depending on the account to which the cash was deposited [By-Law 9, s. 18(1) and 18 (5)].

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 Q: Is there a specific format for the additional records for cash receipts? Is there a precedent?

A: There is no prescribed format or precedent for these additional records. Suggested guidelines and format examples for book of duplicate cash receipts and the trust receipts and general receipts journals are available online in both the Bookkeeping Guide for Lawyers and the Bookkeeping Guide for Paralegals.

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 Q: Do the additional record keeping requirements apply to the receipt of any amount of cash?

A: Yes. Any time a lawyer or paralegal receives any amount of cash with respect to a client matter, he or she must record the receipt in his or her book of duplicate cash receipts as well as in either the trust receipts or general receipts journal, depending on the account to which the cash was deposited.

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 Q: How long must the additional records for cash receipts be maintained?

A: The book of duplicate cash receipts must be maintained for at least the six-year period immediately preceding the lawyer's or paralegal's most recent fiscal year end. The general receipts journal must also be maintained for this period, while the trust receipts journal must be maintained for at least the ten-year period immediately preceding the lawyer's or paralegal's most recent fiscal year end. See s. 23 of By-Law 9.

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 Q: What if the person providing the cash refuses to sign the receipt as required by the By-Law? Am I then prohibited from accepting the cash?

A: When a lawyer or paralegal receives cash with respect to a client matter, he or she is obliged to make reasonable efforts to obtain the signature of the person from whom the cash is received. His or her inability to secure a signature after making reasonable efforts to obtain one does not preclude the lawyer or paralegal from accepting the cash. However, depending on the circumstance, the lawyer or paralegal should be wary of accepting cash from an individual who refuses to sign a receipt. If he or she decides to accept the cash, he or she should clearly note that the individual providing the cash refused to sign the receipt.

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Q: What actions constitute reasonable efforts to obtain the signature of the person providing the cash?

A: The lawyer or paralegal should consider explaining to the individual providing the cash
• the lawyer's or paralegal's obligations under the By-law, and
• the rationale for the requirement
If the individual still refuses to sign after that explanation, the lawyer or paralegal has discharged his or her obligation under By-Law 9 and may decide to either accept or decline the cash. The lawyer or paralegal should document his or her efforts to obtain the signature of the person providing the cash for the file.

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 Q: Can I refuse to accept cash from my client or others?

A: Yes. Neither the lawyers' Rules of Professional Conduct, the Paralegal Rules of Conduct nor the By-Laws stipulate that a lawyer or paralegal must accept cash. Whether you will accept cash is a policy issue that should be decided by the lawyer, paralegal or firm and should be communicated to the client at the outset of the retainer. Lawyers and paralegals may also wish to consider including as a term of their written retainer agreement the form in which payment of retainers and fees will be accepted by them.

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Q: If I choose to never accept cash, are there any changes to my record keeping or reporting requirements?

A: Yes. The books of original entry for trust receipts and general receipts must include a notation as to the method by which money has been received [By-Law 9, s. 18(1) and 18 (5)]. The books of original entry for trust disbursements and general disbursements always contained a requirement to show the method by which money is disbursed [By-Law 9, s. 18(2) and 18(6)].

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 Q: The original payment I received was in cash and now a refund is required. How do I refund money in cash?

A: Per s. 6(e) of By-Law 9, lawyers and paralegals are permitted to accept cash for payment of fees, disbursements, expenses or bail provided that any refund out of these receipts is made in cash. Though the By-Law does not include a prescribed method to withdraw cash from either the trust or general account, the simplest method for a lawyer or paralegal to do so is by way of withdrawal slip completed in person at his or her financial institution. The lawyer or paralegal should obtain a duplicate withdrawal slip on which the client file number and the purpose of the withdrawal should be noted for his or her financial records. This method provides the best audit trail.
Lawyers and paralegals are prohibited from writing a trust cheque payable to "cash" [By-Law 9, s. 11] and, if a lawyer or paralegal has properly coded his or her bank card for deposits only, he or she should not be able to withdraw funds from trust using an ABM. Though there is no prohibition against withdrawing cash from the general account using these methods, the use of a withdrawal slip at the financial institution remains the best method available.
If a lawyer or paralegal is uncomfortable with withdrawing cash directly from the trust account, he or she may withdraw cash from his or her general account and may then reimburse himself or herself from trust as permitted by By-Law 9. Regardless of whether the funds for the cash refund came from the trust or general account, the lawyer or paralegal should have the person receiving the cash sign a receipt. If the recipient of the cash refuses to sign a receipt, the lawyer or paralegal should have a witnesses present to document that the cash was provided to the individual.

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