Assembling the monthly three way trust reconciliation packet
Three balances have to agree. The bank statement and the book balance are the easy pair. The total of every client ledger is the one that drifts, and the reason is small: a bank service charge taken from trust, a trust disbursement uncleared for two quarters, a card refund netted against the wrong account or one ledger pushed below zero so that one client covers another. Pulling the statement, matching it against Clio and QuickBooks Online, and listing the rows that break is the mechanical half. Preparation can be automated, certification cannot.
The same client name is typed into the conflicts database, the practice management system, the document management system and the ledger, and a conflict is only found later if two people spelled it the same way.
A firm organises everything by matter, and the matter record is created by hand from an intake form. That single re-keying step seeds four systems, and because there is no shared identifier between them, every later reconciliation is a name match against human typing.
- Clio
- QuickBooks Online
- Excel
When this is the wrong thing to build
Pick something else if the firm holds no client money at all, which is the case for some transactional and advisory practices. Where a bookkeeper already runs the reconciliation each month and it balances, the gain is a shorter task rather than a caught error, and that is a thinner reason to build.
The constraint that shapes it
The conduct rules decide what may be automated here, and they are adopted state by state rather than nationally, so specifics have to be checked against your own jurisdiction. More on how this sector works.
Two sources of truth. One queue of the rows that do not line up. Read what this shape is, or start from one of these.
- Rebuilding an annual operating expense reconciliation from the lease
- Reconciling a broker trust account three ways every month
- Matching a closed transaction back to the lead that produced it
- Collapsing two overlapping MLS feeds into one property list
- Matching refrigerant bought against refrigerant put into equipment
- Finding the parts the truck says it still has
- What does a three way trust reconciliation actually compare?
- Why is my IOLTA balance off by a bank service charge?
- How do I find a negative client ledger in Clio?
- Can QuickBooks Online do trust accounting for a law firm?
- What happens if a trust account overdraft is reported to the bar?
Back to law firms, or see how this is priced and scoped.