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This free client trust account reconciliation checklist runs one three-way reconciliation of a law firm’s client account: the bank statement balance, the client cash book balance and the total of the individual client ledgers, agreed at the same date. It is for cashiers, bookkeepers, COFAs and managing partners. The cashier brings the books up to date, lists uncleared items and prepares the statement. Then the checklist works through the checks a client account needs: ledgers in debit, credit balances on the business side, residual and dormant balances, transfers to the office account against bills, withdrawals, interest and any breach found. The COFA, a manager or the responsible lawyer signs it off before the records are filed and the next reconciliation is set. Choose England and Wales (SRA Accounts Rules) or the United States on the first task, and the matching notes appear; US readers are pointed to their own state’s rules. When a matter ends, the Legal Matter Closing Checklist brings its ledger to nil.
A bank reconciliation proves that the cash book agrees with the bank. A law firm’s client account needs one more step, because the money in it belongs to many clients. The three-way reconciliation also proves that the total of the individual client ledgers equals the cash book and the bank, so every client’s money is accounted for and no client is overdrawn on another client’s money.
This checklist runs one reconciliation for every client account the firm holds, at one date. In England and Wales it follows the SRA Accounts Rules 2019. In the United States the rules come from each state’s rules of professional conduct and state bar, so the US notes tell you what to check rather than giving one state’s answer. It is a working checklist, not legal advice: your regulator’s rules and your own advisers decide what applies to your firm.
Covers: the bank statement, the client cash book and the client ledger total agreed at one date, plus debit, residual and dormant balances, transfers for costs, interest, breaches and the sign-off.
Cadence: at least every five weeks in England and Wales; as your state requires in the US.
Output: a signed reconciliation and a list of open items.
Covers: matching the firm’s own bank accounts to its ledger, investigating reconciling items and an independent review.
Use it: for the office (business) account and any other account that holds the firm’s own money. Bank Reconciliation Checklist.
Covers: the final bill, taking costs, returning the balance and bringing one client’s ledger to nil when a matter closes.
Use it: for each file you close; the reconciliation then shows no balance left behind. Legal Matter Closing Checklist.
Nine phases take one reconciliation from the bank statements to a signed record. The rules you choose on the first task (England and Wales, a US state or elsewhere) show the matching notes. An unexplained difference, a ledger in debit, a balance with no reason to hold it and a breach each add their own tasks. The sign-off is the gate: the records and the next reconciliation wait until it is done.
The cashier starts the run once the bank statements to the reconciliation date are in. Choose the rules that apply on the first task: it shows the matching notes on the tasks where the rules differ. Every due date counts in business days from the reconciliation date.
A three-way reconciliation compares three figures at the same date: the balance on the bank statement, the balance in the client cash book and the total of the individual client ledger balances. Bring the books up to date before you take the figures.
Adjust the bank balance for timing differences until it should equal the cash book. Every adjustment is a listed item with a date and an amount, never a single balancing figure.
The cash book balance must equal the total of the client ledger balances, and both must agree to the adjusted bank balance. An unexplained difference adds two tasks: find the cause, then correct the records or replace any money missing.
A reconciliation that agrees can still hide a problem in the ledgers. A debit balance adds a task to replace the shortfall, and a balance held with no reason to keep it adds the tasks to return or deal with it.
Check the movements behind the balances: every transfer to the office account against a bill, every withdrawal against an authority and enough money for that client, and interest worked out under the firm’s policy.
Record every breach the reconciliation found, even one already put right. A breach adds tasks to correct it promptly, decide whether it must be reported, and tell any client who has lost out.
Someone who did not prepare the reconciliation checks it against the source documents and signs it off. The sign-off is the gate: nothing after it can be completed until it is done.
File the signed reconciliation with the records it relies on, carry the open items forward and set the date of the next one.
All three figures are taken at the same date. The bank figure is adjusted for timing items; the cash book and the ledger total should already be equal.
| Balance | Where it comes from | Adjust for | Common causes of a difference |
|---|---|---|---|
| Bank statement balance | The statement for each client account at the reconciliation date | Money paid in but not yet credited; payments made but not yet presented | Bank charges, interest or returned cheques not posted; receipts nobody has recorded |
| Client cash book balance | The running total of every transaction through the client accounts | Nothing: post every transaction first | Missing or duplicated postings; a business account entry posted to the client cash book |
| Total of client ledger balances | The list of every client ledger balance with a running total | Nothing: list debit balances separately, never net them off | A posting to the wrong ledger; an unallocated receipt; a ledger in debit |
Where the rules differ, the notes on each task follow the answer on the first task. The US column says what to check in your state, because each state sets its own rules.
| Point | England and Wales (SRA Accounts Rules 2019) | United States |
|---|---|---|
| How often | At least every five weeks, for every client account (rule 8.3) | As your state’s rules require; frequency varies by state |
| Bank statements | For all client and business accounts at least every five weeks (rule 8.2) | Check your state’s record-keeping rule |
| Who signs off | The COFA or a manager of the firm (rule 8.3) | Check whether your state names who must review and sign |
| Differences | Investigate and resolve promptly (rule 8.3); correct breaches promptly on discovery (rule 6.1) | Check your state’s rules on correcting and reporting problems |
| Costs from client money | A bill or written notice of costs first, then the exact sum, covered by that client’s money (rule 4.3) | Check your state’s rule on withdrawing earned fees |
| Interest | A fair sum of interest for clients, unless agreed otherwise in writing (rule 7) | Check your state’s rules on interest and IOLTA accounts |
| Money you cannot return | £500 or less per client matter to charity under the SRA’s prescribed circumstances; over £500 needs SRA authority | Your state’s unclaimed property law and trust account rules |
| Keeping records | At least six years (rule 13.1) | The period your state sets |
Sources. The SRA Accounts Rules (version in effect from 25 November 2019), the SRA’s guidance on keeping accurate client accounting records, its prescribed circumstances for residual balances and its warning notice on money missing from client account. In the United States, start with your state bar’s client trust account rules and your state’s version of the rule on safekeeping property.
Enter the reconciliation date and every task gets a due date counted in business days from it. Schedule the checklist to start itself each month, so the next run never depends on someone remembering. Open reconciliations show on the Reports Grid, and overdue alerts go to the people assigned.
An unexplained difference, a ledger in debit, a balance with no reason to hold it and a breach each add the tasks that deal with them, assigned to the cashier, the fee earner or the person who signs off. In a clean month they stay hidden.
The sign-off is a gate: the records and the next reconciliation cannot be ticked off until the COFA, manager or responsible lawyer has signed. Statements, ledger lists and the signed pack are uploaded to the tasks they belong to, and the activity log shows who did what and when. See how approval steps work.
CheckFlow does not hold client money, match bank transactions or calculate ledger balances; your practice management or accounts system does that. CheckFlow runs the process around it: who reconciles by when, what evidence is attached, which items are still open and who signed the result. See how recurring checklists start each reconciliation on time.
Close each file properly with the Legal Matter Closing Checklist, so no balance is left behind, and open new matters with the Legal Case Intake Checklist. Reconcile the firm’s own accounts with the Bank Reconciliation Checklist as part of the Month-End Close Checklist, and review the wider controls once a year with the Legal Department Compliance Audit Checklist.
Legal Matter Closing Checklist
Bank Reconciliation Checklist
Legal Case Intake Checklist
Legal Department Compliance Audit Checklist
Month-End Finance & Accounting Close Checklist
Describe the process in a sentence and the AI checklist generator drafts the phases and tasks for you.
It compares three figures for a client account at the same date: the balance on the bank statement, the balance in the client cash book and the total of the individual client ledger balances. The bank figure is adjusted for money paid in but not yet credited and payments not yet presented. When all three agree, the money in the account matches what the firm owes each client. A difference has to be found and corrected, not carried forward.
In England and Wales, rule 8.3 of the SRA Accounts Rules requires a reconciliation at least every five weeks for every client account a firm holds or operates. In the United States the frequency is set by each state’s rules of professional conduct and state bar, and it varies, so check your own state’s client trust account rules.
In England and Wales the record of each reconciliation must be signed off by the firm’s Compliance Officer for Finance and Administration (COFA) or a manager of the firm. The SRA’s guidance suggests they check the statement, question unusual or old items and record the date they signed. In the US, check whether your state names who must review and sign it.
It is a client ledger that shows more paid out than was ever held for that client, so other clients’ money has paid for it. It breaks the rule that money is withdrawn for a client only when enough is held for that client (rule 5.3 in England and Wales), so put it right at once: replace the shortfall from the firm’s own money and find the cause. The SRA’s guidance asks firms to list debit balances separately, never to net them off against credit balances, and to investigate them fully.
Return money promptly once there is no longer a proper reason to hold it (rule 2.5 in England and Wales). If the client cannot be traced, the SRA allows a balance of £500 or less on any one client matter to be paid to a charity, after reasonable steps to return it, with the steps and payments recorded. Over £500 needs the SRA’s authority first. In the US, your state’s unclaimed property law and trust account rules apply.
A bank reconciliation agrees the cash book to the bank. The three-way reconciliation adds the client ledgers, so it also proves the money is held for the right clients in the right amounts, and it adds the checks a client account needs: debit balances, residual balances, transfers for costs and interest. Use the Bank Reconciliation Checklist for the firm’s own accounts.
Not in England and Wales. Rule 4.3 of the SRA Accounts Rules requires a bill of costs or other written notification of the costs before client money is transferred to pay them, and the transfer must be for the specific sum in it and covered by the money held for that client. In the US, check your state’s rule on when earned fees may be withdrawn from a client trust account.
In England and Wales, at least six years, stored securely (rule 13.1 of the SRA Accounts Rules). Keep each signed reconciliation with the bank statements, ledger lists and notes it relies on, so your reporting accountant can follow it. In the US, your state sets the retention period for client trust account records.
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