Accountants for Law Firms & Solicitors in Manchester

Three-Way Client Account Reconciliations

One of the most important controls under the SRA Accounts Rules is the three-way reconciliation. A three-way reconciliation compares:

• The client bank account balance
• The client cashbook balance
• The total of individual client ledger balances

All three figures should agree. Where differences exist, they must be investigated and corrected promptly. Three-way reconciliations help identify posting errors, missing transactions, incorrect transfers, unallocated receipts and client money shortages.

Failure to maintain accurate reconciliations can expose firms to regulatory breaches and increased compliance risk. The SRA Accounts Rules require firms to maintain accurate accounting records and regularly reconcile client accounts so that any discrepancies are identified and investigated promptly. Three-way client account reconciliations should be completed at least every five weeks, although many firms perform them monthly as good practice. Any differences should be investigated and resolved promptly.

Office Account vs Client Account

Many compliance issues arise because firms fail to distinguish correctly between office money and client money. Client money belongs to clients or third parties. Office money belongs to the firm. Incorrect posting or transfers between office and client accounts can result in breaches of the SRA Accounts Rules and, in some cases, client money shortages.

We help firms establish robust procedures for:

Residual client balances should be reviewed regularly and dealt with in accordance with the SRA Accounts Rules once reasonable attempts have been made to return funds to the client.

How We Support COFAs

A Compliance Officer for Finance and Administration (COFA) is responsible for taking all reasonable steps to ensure compliance with the SRA Accounts Rules and reporting material breaches where required. Read the SRA's COFA guidance. We provide support through:

We also support firms using LEAP by assisting with reconciliations, financial reporting, client ledger reviews and accounting processes to help maintain compliance with the SRA Accounts Rules.

Rather than simply reporting historic financial information, we work with firms throughout the year to strengthen financial controls, identify potential compliance issues early and support ongoing compliance with the SRA Accounts Rules.

Annual Accounts & Tax Returns

Statutory accounts, corporation tax returns and partnership tax returns for law firms and legal practices.

Bookkeeping & Payroll

Day-to-day bookkeeping, office account management and payroll processing for fee earners and support staff.

Management Accounts

Monthly or quarterly management information giving partners clear visibility of practice performance and profitability.

VAT Returns

VAT registration reviews, return preparation and MTD-compliant submissions for law firms with taxable income streams.

Client Account Reconciliations

Three-way reconciliations comparing client bank balance, cashbook and ledger totals — completed to SRA timescales.

COFA Support

Monthly compliance reviews, financial controls testing, LEAP system reviews and breach monitoring support for COFAs.

Partner Tax & Self Assessment

Individual partner tax returns, drawings reviews, profit allocations and tax reserve calculations.

Tax Planning

Corporation tax planning, partner drawings structures and efficient extraction strategies for legal practices.