Guides

How to do a three-way reconciliation, step by step — A worked three-way trust account reconciliation: adjusted bank balance, trust ledger balance and client ledger totals, with outstanding checks, deposits in transit and a bank fee.
Trust account reconciliation rules: what the ABA and state bars say — What the ABA Model Rules on Client Trust Account Records, North Carolina Rule 1.15-3 and the California trust accounting handbook say about reconciling client trust accounts.
Outstanding and stale checks in a trust account — How outstanding checks and deposits in transit work in a trust account reconciliation, when a trust check is stale, and what to do about uncashed checks.
Negative client ledger balance in a trust account: causes and fixes — Why a client trust ledger goes negative, why it means other clients' money was used, and how to find and correct it before your next three-way reconciliation.
Bank fees in a trust account: how to record them — Why bank service charges break a three-way reconciliation, how ABA Model Rule 1.15(b) lets lawyers keep their own funds in trust for fees, and how to record them.

Tools