Reconciling a Trust (or Client) Account

In this article:

• Performing a Manual Reconciliation
• Performing an Automatic Reconciliation
• Performing an Adjustment

Reconciling a trust account is an important aspect of compliance and trust administration.   

When completing a reconciliation, you will have two options for how you want to reconcile: manual (printed) and electronic. A manual reconciliation requires you to manually refer between Actionstep's set of transactions and the ones provided by your bank, while an electronic reconciliation allows you to upload a copy of the bank transactions to Actionstep and manage everything from within the page. 

If you're performing a manual reconciliation, the workflow supports performing either one reconciliation at the end of the month or daily reconciliations. For example, if you are reconciling hundreds of transactions during the month, it may make more sense to reconcile the account daily. At the end of the month, you can finalize and close the reconciliation. 

Performing a Manual Reconciliation

When reconciling your trust bank account, you can manually compare the information in Actionstep with the statement you receive from your bank. As transactions are reconciled, you can mark them as matched.  

Additionally, if you prefer to perform daily (rather than monthly) reconciliations, you can save your progress throughout the month without finalizing the reconciliation. You do this by updating the Statement Date and Closing Balance each time you reconcile. This means you don't have to discard or restart a reconciliation. 

As you perform a reconciliation, you can view how much of the balance has been matched by looking at the (0.00 Matched) field at the bottom of the table. This amount represents transactions across the entire list and not just what's displayed on the current page.

To perform a trust bank reconciliation:

1. In Practice Management, choose whether you are creating a new reconciliation or editing an existing (current) reconciliation.
2. If creating a new reconciliation:
   1. Go to Trust > Reconciliations > Create Reconciliation. The Create Reconciliation page appears.
       
   2. Click the Trust account drop-down list and choose the account you want to reconcile. Additional fields appear on the page.
   3. Enter the Statement/ref No.
   4. Enter the Statement date. 
   5. For the Statement format field, select Printed bank statement.
   6. Enter a Closing balance, as shown on the statement. This is the amount the system will reconcile towards.
   7. Click Save. The Reconciliation page appears.
   8. Proceed to Step 4.
3. If editing an existing reconciliation:
   1. Go to Trust > Reconciliations > Reconciliations List. The Trust Bank Account Reconciliations page appears.
   2. In the list of reconciliations, click the Unreconciled entry to view the current reconciliation. The Reconciliation page appears.
   3. If you are performing daily reconciliations, click the edit icon next to either the Statement Date and Closing Balance field and update the fields to match today's date and balance.
      
   4. Proceed to Step 4.
4. For each transaction in the Reconciliation list, find the correlating transaction on the printed bank statement and toggle the Match option for that transaction.
   
   As you match transactions, the Out by field that appears above the list is updated to show any differences.
   
   Additionally, at the bottom of the list, you can view the amount from the transactions that has been matched.
   
5. If your reconciliation doesn't balance, you can enter an adjustment by clicking the link below the Out by field. (See Performing an Adjustment, below, for more details.)
   
6. Optionally, click Draft Reconciliation Report to view a mid-process update on where you are in your reconciliation. The generated report shows an Unreconciled status field to help you track that it has not yet been completed.  
7. When the reconciliation period is over and you fully have matched all entries, click Fully Matched. 
8. If there are unreconciled transactions—either from Actionstep or the bank statement—review them on the Bank Account Reconciliation page and click Save + next. The Reconciliation Summary page appears, showing you a summary of all the reconciled receipts/withdrawals and any adjustments. 
9. Click Complete Reconciliation to lock it and prevent it from being edited any further. 

Performing an Automatic Reconciliation

For electronic statement uploads, OFX/QIF file formats are supported. If your trust jurisdiction discriminates between entry date and transaction date, it is advised that you use manual reconciliations to minimize the chance of error.

If you are creating an electronic reconciliation, you cannot make adjustments during this workflow. Adjustments can only be made during a manual reconciliation.

Part 1: To create a new reconciliation:

1. In Actionstep, go to Trust > Reconciliations > Create Reconciliation. The Create Reconciliation page appears.
2. Click the Trust account drop-down list and choose the account you want to reconcile. Additional fields appear on the page.
3. Enter the Statement/ref No.
4. Enter the Statement date. (You can edit this date later when you're in the reconciliation workflow by clicking the edit icon next to it.)
5. Select Electronic statement upload. The page is updated with additional fields.
   
6. Enter a Closing balance, as shown on the statement. This is the amount the system will reconcile towards.
7. Click the File type drop-down list and choose the type of file you want to upload. Your options include OFX or QIF (using US or EU date format).
8. For the Statement File field, click in the field to browse to and select the bank statement.
9. Click Save. The Reconciliation page appears.
10. For each transaction in the list, find the correlating transaction in the electronic bank statement and toggle the Match option for that transaction. As you match transactions, the Out by field that appears above the list is updated to show any differences.
11. Optionally, toggle between Actionstep View and Bank View to quickly identify which transactions are from missing from either perspective. 
12. With the trust account fully matched to the bank statement, click Save + next. The Reconciliation Summary page appears showing you a summary of all the reconciled receipts/withdrawals and any adjustments. 
13. Click Complete Reconciliation to lock it and prevent it from being edited any further.

Performing an Adjustment

If there are any transactions that have been entered outside of the reconciled period that account for some of the discrepancies between system entries and bank statement items, you can create an adjustment.

To learn more about adjustments, see About Trust Reconciliation Adjustments.

To add an adjustment to your reconciliation: 

1. Complete a trust reconciliation, as described earlier (in Performing a Manual Reconciliation or Performing an Automatic Reconciliation). 
2. If the statement isn't reconciling and you need to make an adjustment, click Includes [n] adjustments totaling [n].
    The Reconciliation Adjustments window appears.
3. Click Add row. Fields appear for the Date, Description, Amount, Category of Discrepancy, and Reason for Discrepancy. Other is suggested as the default for the category and reason fields.
4. Provide the required information for the adjustment. 
   NOTE:  Enter a negative number for withdrawal amounts. You can do this by typing the minus character before the amount.
5. Click Add row as many times as needed to enter additional transactions.
6. Click Save when you're finished. You are returned to the Reconciliation page where you can finish your work.  
7. Optionally, to include adjustments in the Matched amounts, select Include Adjustments at the bottom of the table. 

NOTE:  You can attach documents to the reconciliation once it has been completed. These might include bank statements with your edits if you are completing a manual reconciliation, or additional documentation showing adjustments. Associating these documents with a reconciliation provides easy access to an auditor. To attach a document, go to Trust > Reconciliations > Reconciliations List. Then find the reconciliation in the list and click its paperclip icon.