Trust and Operating Accounts
Clasp supports two types of bank accounts — Trust and Operating. Understanding the difference helps you keep client funds separate from firm funds and stay compliant with bar accounting rules.
Trust Account
A Trust Account holds client funds before they are earned or applied to invoices. It is commonly used for retainers and IOLTA accounts. State bar rules require these funds to remain strictly separated from firm funds at all times.
Never deposit firm funds into a Trust Account, and never use Trust Account funds to pay firm expenses. Commingling funds is a serious bar violation and can result in disciplinary action.
Operating Account
An Operating Account is the firm’s general business account. Use it to pay expenses, receive earned fees, and manage day-to-day firm finances. All firm revenue and outgoing payments flow through this account.
Account Labels
When you connect a bank account via Plaid, Clasp assigns it a label — Trust Account or Operating Account — shown in the Accounts tab under Banking. This label determines how transactions are categorized and reported across the workspace.
Related articles: Connect a Bank Account · View Transactions · Process a Disbursement · Set Up a Citizens Private Bank Account