We only hold tiny amounts of client money. Do we still need a report?

Possibly not. The Rule 12.2 de minimis exemption applies if the firm held no more than £10,000 of client money at any time during the period AND the average client money balance did not exceed £250. Both conditions must be met. Many small firms qualify but few realise. We can review your client account activity and confirm whether you qualify.

How often must we reconcile our client account?

At least every five weeks (Rule 8.3 of the SRA Accounts Rules). This is the regulatory maximum interval. Monthly reconciliation is common practice and gives a buffer against the five-week cap, but five weeks is the rule. The reconciliation must compare the client account ledger total with the client account bank statement balance and explain any differences.

What happens if we miss the 6-month deadline for the Accountant's Report?

The SRA treats late filing as a regulatory matter. A short delay (1-2 months) with a reasonable explanation is typically tolerated. Repeat lateness or unexplained delay can trigger a Forensic Investigation referral, which is materially worse. We aim to issue your report 4-6 weeks ahead of the deadline as a routine matter.

Can you support a newly-appointed COFA?

Yes. New-COFA onboarding is a separate engagement: we walk you through the Accounts Rules in plain English (not regulatory speak), set up your reconciliation rhythm and evidence file, build your breach decision log template, and provide a quarterly check-in for the first year so the role beds in properly.

SRA compliance + accountant's report

SRA Accounts Rules compliance for UK law firms

The annual SRA Accountant's Report is the floor. The work is making sure your firm's client account handling never gives the SRA a reason to look further. We deliver the report, support the COFA, and audit the controls.

Book a free scoping call Take the firm health check

What the SRA Accounts Rules actually require

The current version of the SRA Accounts Rules took effect on 25 November 2019 and has been amended several times since. The headline rules are short but the operational discipline is what matters.

Rule 2: client money must be kept separate from office money in a designated client account
Rule 7: client money interest must be paid to the client when 'fair' — a test based on amount and length of time held
Rule 8.3: reconciliations of every client account and the office account must be performed at least every five weeks (NOT monthly — five weeks is the maximum interval)
Rule 12: an annual SRA Accountant's Report is required within 6 months of the firm's accounting period end, unless a de minimis exemption applies
Rule 12.2: de minimis exemption — firm held no more than £10,000 client money at any time during the period AND average client money balance not exceeding £250

How we work an SRA Accountant's Report

We are independent of your firm and qualified to deliver the report. The typical engagement runs as follows.

Initial scoping call to confirm the period end, the volume of client matters, and any known issues
Working file request: bank statements for all client and office accounts for the period, full client matter ledger extracts, reconciliation evidence file, breach decision log
On-site or remote review of the working file across approximately 2-5 days depending on firm size
Sampling of client matters with attention to any high-balance accounts and any matters flagged as concerns by the COFA
Draft report issued to the firm for review, with any issues surfaced for response
Final report issued to the SRA inside the 6-month deadline; firm retains a copy

Common SRA Accounts Rules breaches we see

Most breaches are operational, not deliberate. We work with COFAs to surface them early and close the controls.

Reconciliation interval exceeding 5 weeks because the bookkeeper went on holiday and no one covered
Client money left in office account longer than a few days after settlement
Disbursement payments made from client account before billing the client
Residual client balances under £50 left to gather dust years after matter completion
Client money interest policy that doesn't match what the firm actually does in practice
COFA decision log absent or last updated 18 months ago

Frequently asked

We only hold tiny amounts of client money. Do we still need a report?: Possibly not. The Rule 12.2 de minimis exemption applies if the firm held no more than £10,000 of client money at any time during the period AND the average client money balance did not exceed £250. Both conditions must be met. Many small firms qualify but few realise. We can review your client account activity and confirm whether you qualify.
How often must we reconcile our client account?: At least every five weeks (Rule 8.3 of the SRA Accounts Rules). This is the regulatory maximum interval. Monthly reconciliation is common practice and gives a buffer against the five-week cap, but five weeks is the rule. The reconciliation must compare the client account ledger total with the client account bank statement balance and explain any differences.
What happens if we miss the 6-month deadline for the Accountant's Report?: The SRA treats late filing as a regulatory matter. A short delay (1-2 months) with a reasonable explanation is typically tolerated. Repeat lateness or unexplained delay can trigger a Forensic Investigation referral, which is materially worse. We aim to issue your report 4-6 weeks ahead of the deadline as a routine matter.
Can you support a newly-appointed COFA?: Yes. New-COFA onboarding is a separate engagement: we walk you through the Accounts Rules in plain English (not regulatory speak), set up your reconciliation rhythm and evidence file, build your breach decision log template, and provide a quarterly check-in for the first year so the role beds in properly.

Free scoping call

Get your SRA Accountant's Report in safe hands

30-minute scoping call. We confirm whether the de minimis exemption applies, the period end, and a fixed fee for the report and any control improvements.

Book your free call

We will be in touch within 24 hours.