How to: Handle solicitors’ accounts

13th May 2014

There have been various stories in the news lately about solicitors who have been prosecuted for embezzling company funds. While you are very unlikely to be planning to do this, it is essential that you are meticulous when it comes to keeping your accounts in order. 

For a start, you will need to adhere to the 52 Solicitors Accounts Rules (SARs) set forth by the Solicitors Regulation Authority (SRA). 

The aim of these SARs is to ensure that solicitors act with integrity, protecting client money and assets at all times and only ever using client accounts in an appropriate manner. 

While most solicitors will naturally wish to comply with these aims, a lack of understanding can lead to accidental infringements, which is why professional help is needed. 

Among other things, the rules stipulate that: 

  • Client money must be kept separate from practice money with a recognised bank or building society. These client accounts must be subject to proper record-keeping and an annual accountant's report. 
  • Solicitors must be able to produce client accounts on request, and records should be written up on a weekly basis at the very minimum. 
  • Client money must be paid into the appropriate account without delay and the balance returned to the client at the correct time. 
  • Undrawn costs must not remain in a client account as a buffer, and any interest accrued should be paid to the client. 
  • All practices must have a compliance officer for finance and administration (COFA) in place, and a registered auditor must sign the annual report that is submitted to the Solicitors Regulation Authority. 

If you are a solicitor, it is essential that these rules are followed to the letter. An experienced accountancy firm like ours will explain your responsibilities when it comes to accounts and auditing and will ensure that your firm is compliant with all SRA rules. 

For more information about SARs and general accountancy services for solicitors, contact Dunkley’s today. Email advice@dunkleys.accountants or call 01454 619900.

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