How Often Must a Solicitor Reconcile the SRA Client Account Under Rule 8?

What Is the SRA Client Account Reconciliation Requirement?

The SRA Accounts Rules (SAR) impose a strict timetable for reconciling your firm's client account. Rule 8.3 of the current SAR (effective from 25 November 2019) states that a solicitor must carry out a reconciliation of the client account at least once every five weeks. This is not a suggestion. It is a mandatory compliance requirement.

Many solicitors assume the rule means "monthly" and that a calendar-month cycle is acceptable. That assumption is risky. The five-week maximum is shorter than a typical monthly cycle when you consider that some months have five weeks. A firm that reconciles on the last day of each calendar month could, depending on the calendar, go six or even seven weeks between reconciliations. That is a breach.

The rule applies to every SRA-regulated firm that holds client money. If your firm holds any client money at all, you must reconcile at least every five weeks. The only exception is the de minimis exemption for the annual accountant's report, but that does not exempt you from the reconciliation requirement itself.

Why Five Weeks? The Regulatory Logic

The five-week maximum interval is designed to catch discrepancies early. Client money is not the firm's money. It belongs to clients, often in large sums, and the SRA expects firms to demonstrate rigorous control. A five-week gap means that if an error occurs, it is identified and corrected within a maximum of 35 days. That is a reasonable window for a busy practice.

The rule also aligns with the requirement to maintain client account records that are up to date at all times. If you reconcile every five weeks, you are effectively checking your records against the bank statement every five weeks. Any difference between the two must be investigated and resolved promptly.

In practice, most well-run firms reconcile more frequently than every five weeks. Weekly or fortnightly reconciliations are common, especially in high-volume conveyancing practices where client money flows in and out daily. The five-week rule is the regulatory floor, not a best-practice target.

What Does a Proper Client Account Reconciliation Look Like?

Under SAR Rule 8, the reconciliation must compare the client account bank statement balance with the firm's client ledger balances. You must produce a statement that shows:

• The total of all client ledger balances (the amount you owe to clients collectively).
• The client account bank balance (the money you hold in the bank).
• A clear statement that these two figures agree, or a schedule of reconciling items if they do not.

If the two figures do not agree, you must identify the difference and resolve it. Common reconciling items include uncleared cheques, bank charges not yet posted, or timing differences on deposits. You cannot simply note the difference and leave it. The SRA expects you to investigate and correct any discrepancy.

The reconciliation must be signed and dated by the person who performed it. It should also be reviewed by a second person, typically the COFA (Compliance Officer for Finance and Administration) or a partner. This second review is not a formal requirement of Rule 8, but it is strong evidence of good governance if the SRA ever inspects your firm.

Common Pitfalls in Client Account Reconciliation

One of the most frequent errors we see in practice is the firm that reconciles the client account bank balance but forgets to reconcile the individual client ledgers. The rule requires both. You must check that the total of all client ledger balances equals the bank balance. If you only check the bank statement against your cashbook, you are not fully complying.

Another common mistake is failing to reconcile on time because of holidays or staff absence. The five-week clock does not pause for annual leave. If your designated reconciler is away, you must have a backup person trained and authorised to perform the reconciliation. A firm that misses the five-week deadline because the accounts manager was on holiday has still breached the rules.

A third pitfall is the firm that reconciles the client account but does not keep a clear audit trail. The SRA can ask to see your reconciliations at any time. If you cannot produce them, or if they are incomplete, you risk regulatory action. Keep all reconciliations on file for at least six years, as you would with other accounting records.

What Happens If You Miss the Five-Week Deadline?

Missing the five-week reconciliation deadline is a breach of the SRA Accounts Rules. The SRA takes breaches seriously, even if no client money was lost. A breach can lead to:

• A formal warning letter from the SRA.
• Increased regulatory scrutiny, including a forensic investigation.
• A fine, which can be significant for larger firms.
• In serious or repeated cases, referral to the Solicitors Disciplinary Tribunal.

The SRA also expects firms to self-report breaches. If you discover that you missed a reconciliation deadline, you must report it to the SRA promptly. Failure to self-report can be treated as a separate breach of the SRA's transparency requirements.

If you are a COFA, you have a personal duty to ensure compliance. A COFA who knowingly allows the firm to miss reconciliations can face personal regulatory action, including a ban from the role.

Practical Steps to Stay Compliant

Here is a practical checklist for any solicitor responsible for client account reconciliation:

• Set a fixed day each month for reconciliation, but ensure it never exceeds five weeks. For example, reconcile on the last Friday of every month. That gives you a maximum of five weeks between reconciliations, assuming no five-Friday months.
• Use a reconciliation template that clearly shows the bank balance, total client ledger balances, and any reconciling items. Keep a copy for your records.
• Have a second person review and sign the reconciliation. This is not mandatory but is strongly recommended.
• Train a backup person to perform the reconciliation in your absence.
• Keep a log of all reconciliations, including dates and signatures. This log is your evidence of compliance if the SRA asks.

If you use accounting software designed for law firms, most packages include a reconciliation module. But the software is only as good as the data you put in. Ensure that all client transactions are posted to the correct ledgers promptly. A reconciliation is only reliable if the underlying records are accurate.

How Does This Fit With the Annual Accountant's Report?

The five-week reconciliation rule is separate from the annual accountant's report requirement. The accountant's report (Form SRA 001 or equivalent) is submitted once a year and covers the firm's compliance with the SRA Accounts Rules for that year. The reconciliation is a day-to-day compliance task.

However, the two are linked. When your accountant prepares the annual report, they will review your reconciliations as part of their testing. If they find that you missed reconciliations during the year, they must report that in the accountant's report. That can trigger SRA action.

The de minimis exemption for the accountant's report applies if your firm held no more than £10,000 client money at any time during the year and the average balance did not exceed £250. But even if you qualify for the exemption, you still must reconcile every five weeks. The exemption only removes the need for an external accountant's report. It does not remove the reconciliation requirement.

What About Client Account Checking Under SAR Rule 8?

Rule 8 also covers the broader requirement to keep client account records up to date. The reconciliation is one part of that. You must also ensure that client account records are accurate and complete at all times. This means posting transactions promptly, maintaining individual client ledgers, and keeping a client cashbook.

The five-week reconciliation is the formal check that your records match the bank. But you should also perform informal checks more frequently. For example, a daily or weekly review of the client cashbook can catch errors before they become problems.

If you are a sole practitioner or a small firm, the reconciliation task often falls to you personally. Do not delegate it to a non-solicitor staff member without proper training and supervision. The SRA holds the solicitor responsible for compliance, not the bookkeeper.

How We Can Help

At Accounts for Lawyers, we specialise in SRA Accounts Rules compliance for UK solicitors. We help firms set up reconciliation procedures, train staff, and prepare for SRA inspections. If you are unsure whether your current process meets the five-week rule, we offer a free firm health check that includes a review of your reconciliation cycle.

We also provide COFA compliance support for firms that want a dedicated compliance partner. Our team includes former COFAs and legal-sector accountants who understand the practical realities of running a law firm.

If you are a partner in an LLP or a sole practitioner, the same rules apply. The structure of your firm does not change the reconciliation requirement. Every solicitor who holds client money must reconcile every five weeks.

For more detailed guidance, see our SRA Accounts Rules Essentials guide, which covers the full set of rules including reconciliation, client money interest, and the annual accountant's report.

If you have questions about your specific situation, contact us. We can advise on your reconciliation process, help you design a compliant system, and provide ongoing support.