Client account reconciliation is one of the most important compliance responsibilities for law firms in England and Wales. Ensuring that client money is correctly handled, recorded, and reconciled in line with the Solicitors Regulation Authority (SRA) Accounts Rules is critical to maintaining trust and avoiding regulatory breaches. 

But what exactly do the SRA rules require when it comes to reconciling your client account?

What Is a Client Account Reconciliation? 

Client account reconciliation is the process of comparing the balance in your firm’s client account records with the balance shown in your bank statement and identifying and resolving any discrepancies. This ensures that all client money is accounted for and accurately recorded. 

For law firms, this is not just a best practice, it’s a regulatory requirement under the SRA Accounts Rules 2019. 

 

What Do the SRA Accounts Rules Say? 

Under Rule 8.3 of the SRA Accounts Rules, law firms are required to:

“You complete at least every five weeks, for all client accounts held or operated by you, a reconciliation of the bank or building society statement balance with the cash book balance and the client ledger total, a record of which must be signed off by the COFA or a manager of the firm. You should promptly investigate and resolve any differences shown by the reconciliation.” 

In practice, this means that your firm must: 

• Reconcile all client bank accounts (including general and designated client accounts) 

• Record who prepared and reviewed the reconciliation 

• Retain reconciliation records for at least six years 

The rules don’t prescribe the exact format, but they do make it clear that reconciling your records regularly and accurately is not optional. 

 

Why Client Account Reconciliation Matters 

Client account reconciliations are one of the most common areas for SRA audits and investigations. Failure to comply with the rules can result in: 

• Regulatory sanctions 

• Damage to your firm’s reputation 

• Increased risk of fraud or error 

• Serious breaches of client trust 

Regular reconciliations also give firms better visibility of client funds and cash flow, helping you to spot issues early and maintain good financial health. 

 

Common Challenges for Law Firms 

Many firms struggle with: 

• Keeping on top of reconciliations when managing multiple client ledgers 

• Lack of internal resources or oversight 

• Errors in manual processes 

• Falling behind during periods of high workload 

At Cashroom, we see these challenges daily and we’re here to help firms stay compliant, efficient, and stress-free. 

 

How Cashroom Can Help 

We support hundreds of law firms across the UK with fully outsourced legal cashiering and compliance services, including: 

• Accurate, on-time client account reconciliations 

• Real-time reporting and oversight 

• Compliance with all SRA Accounts Rules 

• Integration with leading legal software platforms like LEAP, Clio, and Actionstep 

• Support from qualified legal finance professionals 

By outsourcing your legal cashiering, you reduce risk, free up time, and ensure your firm always meets its regulatory obligations. 

Understanding and following the SRA rules for client account reconciliation is vital for any law firm. If you’re struggling to keep up or simply want peace of mind, Cashroom can give you the expert support you need. 

 

Need help staying compliant with the SRA Accounts Rules? 

Get in touch with Cashroom today to find out how our expert team can support your firm.