Trust Account Reconciliation in Clio

In Clio, you can reconcile a trust account against its bank statement. Reconciliation verifies that the trust ledger in Manage matches the bank account statement and keeps a history of reconciliation reports for audit purposes. Regular reconciliation supports compliance with the trust accounting rules in your jurisdiction.

Reconcile a trust account

The steps to start a reconciliation depend on whether it is the first reconciliation for the account. Before you start, you will need a copy of the trust account's most recent bank statement.

Start the first reconciliation

For the first reconciliation, you will need to enter the beginning and ending balances for the date range on your most recent bank statement and your previous reconciliation schedule.

1. Go to Accounts.
2. Click the name of the trust account that you want to reconcile.
3. Click Reconcile account.
4. Enter the beginning and end dates and balances from your bank statement.
5. Click Begin reconciliation.
   • If the beginning balances match your bank statement, match transactions to reconcile the account. See Match transactions to reconcile trust accounts in this article.
   • If the beginning balances do not match, review uncleared transactions from the previous month first. See Review uncleared transactions in this article.

Start a subsequent reconciliation

After the first reconciliation, you will need to enter only the ending balance and ending date from your most recent bank statement for each future reconciliation.

1. Go to Accounts.
2. Select the trust account that you want to reconcile.
3. Click Reconcile account.
4. Enter the ending balance and ending date from your most recent bank statement.
5. Click Begin reconciliation.
6. Match transactions to reconcile the account. See Match transactions to reconcile trust accounts in this article.

Match transactions to reconcile trust accounts

When the beginning balance matches your bank statement, you can match the transactions recorded in the trust ledger against the transactions on the bank statement. As you match transactions, the difference between the ledger and the bank account updates. A reconciliation completes only when the difference is $0.

1. Click Match for each line item that has a corresponding transaction on your bank statement. When every transaction is matched, the difference between the bank statement ending balance and the ledger balance is $0.

2. If the difference is not $0, record the missing entries to correct the discrepancy:

   • Disburse funds: Record a bank statement transaction that disbursed funds to a client.
   • New transaction: Record client or matter funds added, or interest earned or bank fees on the bank account.
   • Add adjustment: Record an entry for any other legitimate discrepancy.

   Note: Use Add adjustment to correct legitimate discrepancies only, not to force a difference of $0. Add details to the description to justify the adjustment and keep a complete audit trail.

3. When the difference is $0, click Finish. If any uncleared transactions are excluded from the reconciliation, a dialog lists them.
4. Review the list of uncleared transactions:
   • Keep only transactions recorded in Manage that have not cleared the bank yet. For example, a cheque deposited on October 31 may not appear on the October bank statement, because the deposit takes a few days to process.
   • Reconcile any other transactions before you finish.
5. When the list holds only uncleared transactions, click Finish.
6. Optional: Click View Report to review the summary, the transactions for the reconciliation period (funds in, funds out, bank interest, bank charges, and adjustments, for both cleared and uncleared transactions), and client ledger details.
7. Optional: Click Export to download a PDF of the report.

Review uncleared transactions

If the beginning balances do not match your most recent bank statement, you will need to review potentially uncleared transactions from the previous period before you reconcile. A dialog opens after you click Begin reconciliation when the beginning balances do not match.

1. Click Next to go through the information.
2. Select Mark uncleared transactions to compare your bank statement to the previous reconciliation period.
3. Find potentially uncleared transactions from the previous month.
4. Clear the checkbox for each transaction that is not on the statement.
5. When the balances match, click Finish.
6. Match transactions to reconcile the account. See Match transactions to reconcile trust accounts in this article.

Up next

• View Reconciliation Reports: View or export a completed reconciliation report.
• Void or Delete a Reconciliation: Void a completed reconciliation or delete one that is still in progress.