Poor record on monthly reconciliation of accounts

A SURVEY of the results of Law Society interventions into law firms has shown that too many practices are not paying enough attention to the monthly reconciliation of their accounts.

The survey has been compiled by Hertfordshire accountancy firm Geo Little Sebire & Co, which has set up a scheme to allow firms to share information from reports from the Law Society monitoring unit.

The firm's first information bulletin, based on more than 50 monitoring unit reports sent in voluntarily by participating firms, outlines the 10 most common accounting pitfalls firms are encountering.

The reports show the most prevalent mistake is not to take the monthly reconciliation of accounts seriously enough.

Alex Lawrie, a partner at Geo Little Sebire, said there was a lack of consistency and formality in monthly reconciliation, which often led to breaches in Law Society regulations.

He said examples of this included interest being credited by banks directly to the general client bank account and failure to review and take action where entries on client account records were not reflected by actual bank transactions.