Solicitors' & Conveyancers' Accounts
Client account, the SRA Accounts Rules, the CLC Accounts Code and legal cashiering in practice.
Do you provide outsourced legal cashiering for CLC-regulated licensed conveyancers?
Yes — it is a division of its own. We work with CLC-regulated licensed conveyancers and property firms in England and Wales, exclusively in InTouch, keeping the client account posted, reconciled and evidenced in line with the CLC Accounts Code. We also know the SRA Accounts Rules, so we can do the same for an SRA-regulated firm doing conveyancing. Your managers remain responsible for compliance; outsourcing the cashiering does not move that.
How often must a law firm reconcile its client account?
In England and Wales it depends on your regulator. Under the SRA Accounts Rules, the client bank statements, cash book and client ledger total must be agreed at least every five weeks, with the reconciliation signed off by the COFA or a manager. Under the CLC Accounts Code, bank reconciliation statements must be produced within seven days of each calendar month end, with reconciling items reviewed and cleared promptly. Either way, firms that reconcile monthly on a fixed date find the exceptions while they are still small.
How often must a licensed conveyancer reconcile the client account?
Under the CLC Accounts Code (England and Wales), bank reconciliation statements must be produced within seven days of each calendar month end. They compare the bank and cash book balances, list the reconciling items and reconcile the client bank accounts to the client account listing. Reconciling items must be reviewed and cleared promptly and any shortfall made good without delay. More frequent checks are a useful internal control, and in conveyancing most firms reconcile more often than the Code requires.
Should a law firm outsource its legal cashiering?
It depends on the size of the firm and who currently does the work. Outsourcing gives you a specialist doing the postings and reconciliations to the relevant SRA Accounts Rules or CLC Accounts Code (England and Wales), cover when people are away, and a second pair of eyes on the client account. What it never does is move the firm's own responsibility: the COFA, HOFA, managers and authorised persons keep their duties, and the firm keeps oversight of the work.
What is a COFA responsible for?
In an SRA-regulated firm in England and Wales, the COFA must take all reasonable steps to ensure the firm complies with the SRA Accounts Rules, and to ensure that facts or matters they reasonably believe are capable of amounting to a serious breach are reported promptly to the SRA. There is also a wider duty to bring relevant facts and matters to the SRA's attention. The COFA role does not remove the compliance responsibilities of the firm's managers, and it is not the same as the day-to-day cashiering work. CLC-regulated practices work to a different framework, where the HOFA and managers have their own reporting duties.
What is a HOFA responsible for in a CLC-regulated practice?
The Head of Finance and Administration, or HOFA, is a formal role in a CLC-regulated alternative business structure. They oversee compliance with the CLC's requirements for handling money and must promptly report breaches of those requirements to the CLC. The HOFA must also promptly report when the practice is in financial distress or at significant risk of becoming financially distressed. Where misappropriation of client funds is discovered, the practice must notify the CLC without delay and replace the shortfall without delay. The practice and its managers retain their own responsibilities: appointing a HOFA or outsourcing legal cashiering does not transfer all accountability to that person or provider.
What is a client account reconciliation?
A client account reconciliation compares the client bank account, client ledger balances and relevant accounting records so differences can be identified and investigated.
What is legal cashiering?
Legal cashiering covers the processing and control of financial transactions within a legal practice, including work involving office and client money: postings, transfers, reconciliations and the records that evidence them. It supports the firm's compliance with the relevant SRA Accounts Rules or CLC Accounts Code, but it is not the same as an audit, and legal cashiering does not itself include a regulatory accountant's report. The firm's managers, COFA or HOFA keep their own responsibilities.
What is the difference between legal cashiering and an accountant’s report?
Legal cashiering maintains the practice’s day-to-day financial records and supports controls such as reconciliations. A regulatory accountant’s report is a separate assessment prepared by an eligible reporting accountant under the applicable rules. Requirements and exemptions differ between SRA and CLC practices. CASS’s legal cashiering service does not itself replace or include that report; any reporting accountant appointment needs to be arranged separately.
What should a law firm look for in an outsourced legal cashiering provider?
Someone who works in your software, knows whether you are regulated under the SRA Accounts Rules or the CLC Accounts Code (England and Wales), reconciles to the required timetable, evidences what they have done, and escalates breaches and residual balances rather than leaving them. Ask how cover works when your cashier is away. The points below are good practice we recommend, not regulatory requirements: your own oversight and accountability stay with the firm either way.
What should we check before changing our conveyancing accounting system?
Agree the transfer of client and office balances, matter histories, outstanding items and supporting records before switching. Reconcile the old system, verify opening balances in the new system and preserve access to required historical records. Test permissions, approvals and reporting, and plan responsibility for the changeover. A software move does not suspend regulatory duties. CASS can discuss cashiering support for practices using InTouch within an agreed scope.
What should we do if a client account reconciliation shows a shortfall?
Escalate it immediately to the responsible compliance officer and managers. Investigate the cause and protect client money; do not use another client’s funds to cover it. SRA firms must promptly correct breaches and immediately replace missing money, while CLC practices must replace shortfalls without delay. Reporting duties depend on the regulator and circumstances; CLC misappropriation must be notified without delay. Do not wait for the next reconciliation to act.
What should we do with money left on a completed matter?
Check who is entitled to it and return it promptly once there is no proper reason to retain it. If the recipient cannot be traced, document your attempts and follow your regulator’s residual or aged-balance procedure. SRA and CLC procedures differ, so do not apply one regulator’s thresholds to the other. Small balances cannot simply be transferred to office account because a matter has ended.
When can money be transferred from client account to office account?
Only when the transfer is permitted by the applicable regulator’s rules, properly authorised and supported by sufficient funds for that client or matter. For SRA firms, transferring money for costs requires a bill or other written notification identifying the relevant costs before transfer. CLC practices follow their own permitted-withdrawal requirements, including properly submitted invoices where applicable. Raising an invoice alone does not make every transfer permissible.