Trust funds account reconciliation is an essential part of working with trust funds. With trust reconciliation in Clio Manage, you can verify that your trust ledger in Clio matches your bank account statement, view a history of reconciliation reports for historical and audit purposes, and maintain compliance in your specific jurisdictions.
Reconcile a trust account
The process for reconciling a trust account looks different depending on whether this is your first reconciliation for the account or a subsequent reconciliation. Open the accordion sections below to learn how do the first reconciliation or subsequent reconciliations for a trust account. Before starting the reconciliation, you will need a copy of the trust account’s most recent bank statement.
If you are reconciling trust accounts for the first time in Clio Manage, you will need a copy of your firm’s most recent bank account statement. You will need to enter the beginning and ending balance in the date range specified in your most recent bank account statement and previous reconciliation schedule.
Note: Your previous reconciliation schedule is most likely the start and end of the previous month.
- Go to Accounts.
- Click on the name of trust account that you want to reconcile to open a view of the account.
- Click Reconcile account to begin the reconciliation process.
- Enter the beginning and end dates and balances in Clio Manage as per your bank statement.
- Click Begin reconciliation.
- If your beginning balances in Clio match with your most recent bank account statement, you can begin reconciling the account. Learn how to reconcile the account in the section below on Match transactions to reconcile trust account.
- If the beginning balances do not match, you will need to first look for any potentially uncleared transactions from the previous month before you can begin reconciling the account. Learn how to review uncleared transactions in the section below on Review uncleared transactions. Click Begin reconciliation.
After completing your first trust account reconciliation in Clio, you will only need to enter the ending balance and ending date from your most recent bank statement for all future reconciliations. Once this is done, you can start matching transactions to reconcile the account.
- Go to Accounts.
- Select the trust account that you want to reconcile.
- Click Reconcile account.
- Enter the ending balance and ending date from your most recent bank statement.
- Click Begin reconciliation.
- See Match transactions to reconcile trust funds account to begin matching transactions.
Match transactions to reconcile trust accounts
After following the steps to start the reconciliation, if your beginning balance in Clio matches with your most recent bank account statement, you can begin reconciling the account. When reconciling a trust account, you will need to match transactions recorded in Clio Manage (in the trust ledger) against the transactions on your bank account statement. As the transactions are matched, Clio displays the difference between the ledger and the bank account. You can only complete a reconciliation when the difference is $0.
Tip: From the reconciliation page, you can save your reconciliation at any time by clicking Save for later in the top right. To continue a previously saved reconciliation, go to Accounts, select the relevant account, then click Continue reconciliation. From the reconciliation page, you can also delete an in-progress reconciliation if you need to start over by clicking the down arrow next to Save for later, then click Delete. If you entered incorrect start and end date and balance information, click Edit to correct your information.
- Click Match for each line item if a corresponding transaction appears in your bank account statement.
- When you have done this for every transaction, the difference between your bank statement ending balance and the Clio account (ledger) balance should be 0.
- If the difference is not $0, find and correct the discrepancy using the relevant option to record transactions in your Clio account ledger.
- New Payment: Click New Payment to return funds to the client(s).
- New receipt: Click New receipt to add funds for the appropriate client(s).
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Add adjustment: Record an adjustment for any trust transactions entered in a month other than the month they occurred, and select the original transaction date when recording an adjustment.
When recording a negative adjustment (credit), enter a negative sign before the value. For the description, enter: Adjustment for [Month] entered on [Current Month].
Note: This option should not be used to force a difference of 0 in order to finish the reconciliation, but rather to correct for legitimate discrepancies. Add relevant details to the description to fully justify the adjustment and ensure a proper audit trail.
- Click Finish when the difference is 0.
- If there are any uncleared transactions that you did not include in your reconciliation, a modal with a list of these transactions will appear.
Note: If your reconciliation does not show a $0 difference, this may indicate discrepancies between your ledger and your bank account statement.
- When the ledger shows more transactions or a higher balance than the bank statement: This can happen if a trust deposit is recorded in Clio but has not yet cleared the bank. Banks typically take 7–10 business days to clear transactions.
- When the bank statement shows more transactions or a higher balance than the ledger: This is often due to human error, such as a missed entry or incorrect amount entered in Clio.
For assistance with trust account reconciliation, consult your bookkeeper or accountant
Review uncleared transactions
If your beginning balances in Clio do not match with your most recent bank account statement, you will need to look for any potentially uncleared transactions from the previous period before you can begin reconciling the account. A modal will appear after you click Begin reconciliation if your beginning balances do not match.
- Click Next to go through the information.
- Select Mark uncleared transactions to begin comparing your bank account statement to the previous reconciliation period.
- Look for uncleared transactions from the previous month. Uncheck transactions that are not on the statement.
- Click Deposit funds to review any unsettled cheques or cash deposits. If needed, deposit funds before proceeding.
- Once the balances match, click Finish to start matching transactions to reconcile your account. Learn more about how to do this in the section above on Match transactions to reconcile trust funds accounts.
View completed reconciliation reports
Once a trust account reconciliation is completed, you can view reconciliation in Clio Manage reports for each time period. Each reconciliation's report can be accessed within Clio for 10 years and includes the reconciliation summary, client ledger details, and transaction details.
- Go to Accounts.
- Click the relevant trust account name.
- Select the Reconciliations subtab.
- Click View report for the relevant reconciliation.
You can use the three tabs to view the reconciliation summary, transaction details, and/or client ledger details. Click Export to download a PDF file of the report to use outside of Clio Manage.
Void reconciliation
Note: Completed reconciliations are locked to protect the integrity of your trust account. If you need to make a correction to a previously reconciled period, such as editing or deleting a transaction, you will have to void the reconciliation and then redo it.
Each new reconciliation for a bank account uses information from the previous reconciliation—specifically the end date and end balance for the previous reconciliation is used to inform the start date and start balance of the new reconciliation. For this reason you will be unable to void a reconciliation for a particular bank account if there are newer reconciliations (completed or in progress). If you do need to void a reconciliation for a particular time period, you will first need to void all reconciliations for more recent time periods.
- Go to Accounts.
- Click the relevant trust account name.
- Select the Reconciliations subtab.
- Click the down arrow next to View Report for the relevant reconciliation.
- Select Void Reconciliation.
Delete in-progress reconciliation
You can delete in-progress reconciliations by opening the in-progress reconciliation, then deleting it.
- Go to Accounts.
- Click the relevant trust account name.
- Select the Reconciliations subtab.
- Click the down arrow next to Continue for the relevant reconciliation.
- Select Delete Reconciliation.
An alternative way to delete an in-progress reconciliation is to delete it from the list of all in-progress and completed reconciliations for an account.
- Go to Accounts.
- Click the relevant trust account name.
- Click Continue Reconciliation.
- Click the down arrow next to Save for later.
- Click Delete.