Monthly trust account reconciliation
A monthly trust reconciliation is required by law. This checklist walks through the standard three-way reconciliation and sign-off steps.
This is a 12-step checklist for a monthly trust account reconciliation in NSW. It covers the three-way reconciliation, unpresented items and sign-off.
The checklist
Obtain the bank statement
Obtain the bank statement as at the last day of the month.
Print the trust cash book balance
Print the cash book balance as at the same date.
Print the client ledger trial balance
Print the trial balance of all individual client ledgers as at the same date.
Identify unpresented items
Identify outstanding cheques and unpresented deposits.
Reconcile bank to cash book
Cash book balance plus unpresented deposits minus outstanding cheques must equal bank balance.
Reconcile cash book to trial balance
Trial balance of client ledgers must equal cash book balance. Investigate any variance.
Investigate credit balances
No client ledger may be in debit — investigate any negative balance immediately.
Investigate stale cheques
Cheques outstanding over a set period must be investigated and actioned.
Prepare the reconciliation statement
Prepare a signed reconciliation statement showing all three figures and any reconciling items.
Principal sign-off
The reconciliation must be signed by the principal of the law practice within 15 working days.
File the reconciliation
File the signed reconciliation in the trust records for the seven-year retention period.
Report any deficit to the regulator
A trust deficit must be reported to the Law Society and the designated trust account authority.
When this checklist applies
Use this checklist every month, within 15 working days of month-end. Missing the deadline is a compliance breach.
Common pitfalls
- Debit balances on client ledgers
- Late sign-off by the principal
- Unpresented items left unresolved
- Not reporting a deficit
- Missing file retention
Run this checklist on a real matter
Quillio generates reconciliation templates and flags ledger anomalies in current NSW format. See /practice-areas/commercial-lawyers.
This checklist is a general guide. Always follow the current Uniform General Rules and your firm's internal procedures.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
Start your free trial