Trust accounting is the strict segregation and tracking of client funds held in trust, a legal and regulatory requirement for lawyers, real estate professionals, and other licensed practitioners in Canada.
When a professional holds client money, a legal retainer, a real estate deposit, or funds pending closing, that money does not belong to the business. It belongs to the client and must be held in a separate trust account, tracked individually, and never mixed with operating funds. Professional regulatory bodies set the rules, and the consequences of breaching them include discipline, loss of license, and personal liability.
Trust accounting errors are rarely intentional misappropriation. They are almost always failures of process: inadequate segregation, poor reconciliation practices, or insufficient oversight. The cost of getting it wrong, in regulatory and reputational terms, is disproportionate to what proper controls require.
See also: Fund Accounting · Financial Reporting · PPSA (Personal Property Security Act)Trust account compliance is a regulatory obligation that cannot be managed informally. See how Wefinx approaches accounting.