Our specialized accounting services are specifically designed to help law firms maintain accurate records of all funds held in trust, including regular account reconciliations and maintenance of individual and general ledgers.
Active Three-Way Reconciliation
As part of our commitment to providing comprehensive and reliable accounting services to lawyers and law firms, we perform three-way reconciliations for all escrow and operating accounts. This involves reconciling the bank statement, book balance, and client balance listing to ensure that the account is accurate and up-to-date.
By regularly reconciling accounts, we can help lawyers detect and correct errors or discrepancies in a timely manner, reducing the risk of financial mismanagement and fraud. In short, active account reconciliation helps lawyers avoid the many issues about which CLE lecturers warn. For law firms with multiple partners who are all responsible for the integrity of the escrow accounts, we provide peace of mind and security. Most lawyers learn of escrow issues upon a dishonored check report, which triggers an audit. We prevent you from being one of those lawyers.
From a business perspective, regular reconciliations are essential for managing cash flow and identifying any potential financial issues or fraud. For example, if we notice consistent discrepancies between the trust ledger book and the bank statement, it could indicate that funds are being misused or embezzled. By identifying and addressing these issues promptly, firms can protect their practice, their reputation, and their clients’ funds.
FAQ
What is account reconciliation?
Account reconciliation is the process of regularly comparing and verifying the records of a financial account against the corresponding records of a financial institution.
Why is account reconciliation important?
Active account reconciliation helps ensure the accuracy and reliability of financial records, detects and corrects errors or discrepancies, and helps maintain the trust of clients by demonstrating responsible financial management.
How often should account reconciliation be performed?
The frequency of active account reconciliation can vary depending on the size and complexity of the account, but it is generally recommended to be performed at least monthly.
Who is responsible for account reconciliations?
Account reconciliation is typically the responsibility of the attorney(s) in charge of the accounts.
Are three-way reconciliations mandatory?
No, but we believe such reconciliations reflect best practices.
Can account reconciliation help prevent financial fraud?
Yes, active account reconciliation can help reduce the risk of financial fraud by detecting and correcting errors or discrepancies in a timely manner.
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