Compliance Requirements for Accounting & Bookkeeping Software

New Compliance Requirements for Businesses Using Accounting & Bookkeeping Software: What Law Firms Need to Know

Effective June 2025, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is introducing enhanced anti-money laundering (AML) and anti-terrorist financing (ATF) requirements that will impact all Ontario-based businesses using accounting and bookkeeping software. While this directive applies broadly across sectors, it holds specific implications for law firms handling trust accounts and client financial records.

At CPA Bhatia Legal, we’re committed to helping legal professionals stay compliant with evolving regulatory frameworks. Here’s what your firm needs to know—and how we can help.

Understanding the New Requirements

The new regulations stem from FINTRAC’s efforts to strengthen Canada’s AML/ATF regime. Businesses using accounting software—including law firms—will be required to meet stricter standards in three key areas:

1. Client Identity Verification

Firms must ensure robust, documented processes for verifying the identity of clients engaging in financial transactions, particularly those involving large sums or international dealings. This means:

• Collecting and securely storing identity documentation

• Verifying the authenticity of information using trusted sources

• Logging verification steps in a secure, auditable format

2. Trust Account Compliance

Trust accounts are a particular focus due to their vulnerability to misuse. New measures require:

• Enhanced documentation of incoming and outgoing trust funds

• Strict segregation of client and operational funds

• Real-time tracking of transactions via compliant software

• Internal controls to flag suspicious activity

3. Secure Record-Keeping

Businesses must ensure that accounting software provides:

• Tamper-proof digital audit trails

• Encrypted data storage

• Easy retrieval of transaction histories for inspection or audit

• Retention policies that meet FINTRAC and CRA expectations (minimum 5 years)

Why This Matters for Law Firms

Law firms manage sensitive financial data and handle client trust funds—areas that are increasingly under regulatory scrutiny. Non-compliance can result in:

• Hefty fines or penalties

• Damage to professional reputation

• Compromised client relationships

• Increased likelihood of audits or investigations

While these rules may seem burdensome, they ultimately protect your firm and clients from being inadvertently involved in criminal financial activity.

How CPA Bhatia Legal Helps You Stay Compliant

CPA Bhatia Legal is uniquely positioned to assist law firms with this transition. With over 25 years of experience in legal bookkeeping, trust account management, and CRA compliance, we offer:

✔ Compliance-Ready Software Setup

We help law firms choose and configure accounting systems like QuickBooks, Clio, or PCLaw to meet new FINTRAC standards, ensuring automated audit trails, client ID tracking, and encrypted document storage.

✔ Trust Account Oversight

Our team provides ongoing reconciliation and monitoring of trust accounts to ensure they remain compliant with Law Society and FINTRAC rules.

✔ Staff Training and Documentation Support

We train your internal staff on the new compliance processes and prepare documentation templates to streamline identity verification, reporting, and audit responses.

✔ CRA and FINTRAC Audit Preparation

Whether proactively reviewing your systems or responding to an inquiry, we offer full support in preparing for government audits with organized, compliant documentation.

Final Thoughts

As regulatory standards evolve, legal professionals must act quickly to modernize their financial systems and internal practices. The June 2025 FINTRAC mandate isn’t just a requirement—it’s an opportunity to build trust with clients, streamline operations, and protect your practice from risk.

At CPA Bhatia Legal, we offer the guidance, tools, and ongoing support to ensure you meet every compliance obligation with confidence. From trust accounting to audit defense, your practice is in safe hands with us.

Need help ensuring your accounting software is compliant?
Contact CPA Bhatia Legal today for a personalized consultation.