An asylum case pays $5,500 in three installments. The client wires $1,800, you mark it "earned" because you filed the G-28, and you spend it. Three months later the bar asks for your three-way IOLTA reconciliation and you have no trust ledger, no client ledger, and no bank reconciliation that ties to either. That gap is a disciplinary case before it is an accounting problem.
Immigration law firm bookkeeping sits at the intersection of trust accounting and flat-fee revenue. The money is often unearned when received, earned as work is completed, and reimbursable only under specific rules that vary by jurisdiction. Getting the trust and the revenue right at the same time is the only way the practice is both profitable and compliant.
The Money Path: Trust vs. Operating
Client funds are not your money until they are earned. In most jurisdictions, a flat fee for an immigration case is considered an advance fee deposit unless the engagement letter explicitly makes it earned on receipt or non-refundable and the client gives informed consent. The default — and the safe harbor — is trust.
- Unearned flat fee:
Dr Cash — IOLTA $1,800/Cr Client Ledger Liability — IOLTA $1,800. The cash is in the trust account, the liability is on your books. - Earned as milestones are completed: Filing the petition, biometrics, interview prep. When a milestone is complete under the engagement terms,
Dr Client Ledger Liability $600/Cr Revenue $600andDr Cash — Operating $600/Cr Cash — IOLTA $600with a trust-to-operating transfer that references the client matter.
Client costs (filing fees, translations) advanced by the firm are different: they can be held in trust as reimbursable costs, or paid from operating and billed as a receivable, depending on the jurisdiction's rules and your engagement letter.
Three-Way IOLTA Reconciliation: The Monthly Proof
Every jurisdiction that requires IOLTA requires a three-way reconciliation at least monthly: (1) bank statement, (2) client ledger (sum of all clients' unearned balances), and (3) book/bank journal. All three must agree, to the penny, with outstanding deposits and checks.
The reconciliation:
- Bank ending balance + deposits in transit − outstanding checks = adjusted bank balance
- Sum of all client ledgers = total trust liability
- Book balance = adjusted bank = client sum
If the bank is $200 higher than the client sum, you have an unallocated deposit — often a client's installment that was posted to the bank but not to the client matter. If the client sum is higher than the bank, you have an overdraft or a book entry that never moved cash. Both are reportable.
Common immigration-specific causes of a break:
- A client's three installments booked to the same matter without splitting by milestone, so the liability is overstated until you recognize revenue correctly
- A USCIS filing fee you advanced from operating but reimbursed from trust, without a clear reimbursement entry
- A flat fee you treated as earned on receipt without the required engagement language, so the auditor reclassifies it as unearned
Keep a separate IOLTA checkbook and never co-mingle. A single operating expense paid from IOLTA, even if reimbursed the next day, is a rules violation in many states.
Flat-Fee Revenue: Installments Are Not Revenue
An immigration firm that books the full $5,500 as revenue on the first $1,800 payment overstates revenue and understates liability. The engagement should define milestones and the amount earned at each.
Example for an employment-based adjustment:
- Retainer: $1,800 on signing — 0% earned until screening is complete
- G-28 and package filing: 40% earned
- RFE response and interview prep: 40% earned
- Interview and approval: 20% earned
Or, for simpler cases, a time-based pro rata over the expected case length, documented in the file.
Revenue recognition: Only the earned portion hits the P&L. The rest stays in the client liability. That is true even if the installments are non-refundable by contract — "non-refundable" is a contract term, not an accounting trigger for revenue.
Refund on termination: If the client terminates and the fee is non-refundable, the earned analysis still controls: you keep what is earned for work done, plus the non-refundable portion to the extent it is reasonable and communicated. Document the work-done analysis; a blanket "all fees non-refundable" without a reasonableness analysis fails in many bars.
Controls That Prevent Discipline
- Engagement letter that states the trust treatment, the milestone schedule, and the refund policy for each case type, signed before money moves
- Daily trust entries, monthly three-way reconciliation signed by the attorney, not just the bookkeeper
- Segregation of duties: The person who records the trust ledger is not the person who can move money to operating without a second approval for that matter
- Client ledger per matter, not per client: A family with two I-130s and an N-400 has three ledgers, each with its own liability
Keep Your Finances Organized From Day One
Immigration practice is a flat fee paid over time and earned over milestones. Trust accounting proves where the money is; milestone revenue proves when it became yours.
Beancount.io keeps that distinction in plain text — every installment as a client liability, every milestone as a revenue recognition, and every three-way reconciliation as a report you can generate, not a spreadsheet you hope balances. Get started for free and make the next IOLTA statement a one-page proof, not a three-week reconstruction.