In ContactsLaw, the trust account reconciliation activity is used to reconcile the transactions posted to a trust bank account, by comparing the records in the system to a bank statement. Under legal profession regulations, trust and controlled money accounts must be reconciled on a regular basis, and must be done so promptly.
Upon finalising a reconciliation, you can print a report which shows:
- The particulars of the account
- The number, reference and date of the reconciliation
- The ledger balance, separately shown as a function of:
- Statement balance, unpresented cheques and outstanding deposits
- Opening ledger balance, debit and credit activity in the system
- Unpresented cheques, itemised
- Cancelled cheques, itemised
- Activity on the trust suspense file
- Any files with a negative trust balance
You may wish to print a copy of the trial balance report to accompany each reconciliation. Trust bank accounts
In general, the reconciliation process for trust bank accounts is as follows:
Obtain (and optionally register) the bank statement for the desired period. For auditing purposes, registering statements and recording them in the 'related document' field is strongly recommended. Enter the statement details (reference, start and end dates, closing balance, total debits and credits) into the activity. Working from the earliest transaction to the newest, match the transactions on the bank statement with the items in the grid. If the date of a transaction or aggregation is incorrect, modify the transaction date (no other particulars can be edited). If the amount is incorrect, you may have to cancel the receipt/payment and post a new transaction with the correct amount. Mark transactions that match with a checkmark. Be sure to mark any cancelled cheques occurring within the period as reconciled; this will ensure that they are reported correctly. Review any transactions which are unmarked in the grid. If they represent unpresented payments, you can leave them unmarked and they will roll over onto the next reconciliation. Payments which remain unpresented for 15 months or longer are considered stale cheques and can be cancelled. Any other unmarked transactions may require further investigation (and possible corrective action). If any transactions on the bank statement do not appear within the grid, first try searching for them within the system - they may have been recorded on the wrong date. If they have not been entered into the system, do so retrospectively and mark the the transactions as reconciled. Verify that the reconciled balance matches the statement balance, as well as the total debits and credits. If so, you can finalise the reconciliation. Otherwise, you must rectify any errors before proceeding. Take care when making corrections and ensure that they are made in compliance with the Legal Profession Regulations. You can save a draft reconciliation if you need to return to the activity later.
|