Occasionally, your bank may incorrectly credit or debit the client bank account, creating a transaction that isn't in relation to any of your client matters.
Whilst you're obliged to rectify this as quickly as possible, as per the Solicitors Accounts Rules, you should also take steps within Access Legal Fusion to record the error, so you can continue to perform vital accounts functions such as a Bank Reconciliation.
This article provides examples of how to rectify this.
You need to create a matter to hold the client-side transactions against. We recommend the client for this matter be your firm, and the matter description is Bank Suspense/Errors.
📌Note: It's always your responsibility to ensure your firm's compliance with the Solicitors Accounts Rules. The support team can advise on how to post transactions, you should ensure you're happy with what you're doing and verify any work with your firm's Compliance Officer for Finance Administration (COFA). We can't provide advice on how to remedy breaches of the rules.
Bank has debited charges from the client account
The bank may sometimes incorrectly charge your banking fees against the client account, when they should actually come from the office account.
If a charge such as this does happen, then your first is to credit the client bank account with the value incorrectly taken, typically from the office account. If the charge was legitimate but debited from the wrong account, then you should also move the balance to the nominal ledger.
1. Post a client payment using the bank suspense matter for the value of the error. If you receive a warning about a client debit, you'll need to override the error in this case.
📌Note: It may be the case that your system doesn't allow client debit postings. Consult your system administrator if you're unable to post this transaction.
2. Post an office to client transfer using the bank suspense matter reflecting your correction of the error from the office bank. Don't choose to offset if prompted.
3. Post a nominal to office journal, debiting the Bank Charges nominal account and crediting the bank suspense matter, for the value of the error. Don't choose to offset if prompted.
This transfers the balance of the error to the nominal ledger. If the bank proceeds to refund the value of the error, you can credit this against the Bank Charges nominal account.
Bank has credited interest to the client account
When you're due credit interest on your balance in the client account, the bank may incorrectly credit this to the client account rather than office. This is incorrect because the Solicitors Accounts Rules and your firm's compliance policies dictate when interest is paid to clients, you should move the interest to the office bank account and reflect it on the nominal ledger.
Post a client receipt to the bank suspense matter for the value of the credit interest.
Post a client-to-office transfer to reflect you're moving the interest to the office bank account.
Post an office to nominal journal, debiting the bank suspense matter, crediting the Bank Interest Received nominal account, for the value of the credit interest.
You can use the Access Legal Fusion Deposit Interest Calculator to automatically calculate and accrue interest to your client accounts in line with your firm's policy.
Highlighting errors on the bank reconciliation without posting
It's possible in Access Legal Fusion to record such errors without actually posting transactions, depending on your system configuration. If set up accordingly, the bank reconciliation system can reconcile the bank when the balance isn't zero.
If the balance isn't zero, it means the value of the selected transactions on Access Legal Fusion doesn't agree with your bank statement, which is usually caused by the above errors.
In this scenario, Access Legal Fusion prompts you for a reason for the difference, which is recorded against the reconciliation and printed on the reports.
Once the bank has corrected the error, a subsequent reconciliation has another difference, which can be recorded as the correction.