The LOw Frequency ARray (LOFAR) is a next-generation radio telescope which uses thousands of stationary dipoles to observe celestial phenomena. These dipoles are grouped in various 'stations' which are centred on the Netherlands with additional 'stations' across Europe. The telescope is designed to operate at frequencies from 10 to 240\,MHz with very large fractional bandwidths (25-100%). Several 'beam-formed' observing modes are now operational and the system is designed to output data with high time and frequency resolution, which are highly configurable. This makes LOFAR eminently suited for dynamic spectrum measurements with applications in solar and planetary physics. In this paper we describe progress in developing automated data analysis routines to compute dynamic spectra from LOFAR time-frequency data, including correction for the antenna response across the radio frequency pass-band and mitigation of terrestrial radio-frequency interference (RFI). We apply these data routines to observations of interplanetary scintillation (IPS), commonly used to infer solar wind velocity and density information, and present initial science results. ; Comment: To appear in Solar Physics, Topical Issue "Observations and Modelling of the Inner Heliosphere"