Reconciling a Trust (or Client) Account

In this article:

• Creating a New 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. Selecting the 'printed bank statement' option will require you to manually refer between Actionstep's set of transactions and the ones provided to you by your bank, whereas the 'electronic statement upload' option will allow you to upload a copy of the transactions to the system and manage everything from within the page.

Please note that a monthly lockout is applied to the trust reconciliation process within Actionstep. This has three unique implications:

1. All the days of the previous month must have been reconciled in a separate reconciliation. This means that if your last reconciliation was for 29 March, you will need to open a new reconciliation for the period 30-31 March (you can do this against a downloaded bank statement) before you can open a new one for April.
2. A new reconciliation cannot relate to two different months. For example, you cannot open a reconciliation for the period between 19 March-18 April. You will need to set the end date of the reconciliation as 31 March and open a new one for the April period. This also breaches the requirement. 
3. A reconciliation cannot span for more than a month. That is, you would not be able to open a reconciliation for the period between 29 March-30 April. This also breaches the requirement.

Creating a New 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.
5. Select the Statement format. Your options include Printed bank statement and Electronic statement upload.
6. Based on your Statement format selection, proceed to the following sections:
   • If you chose Printed Bank Statement, go to "Part 2a: To manually reconcile the trust account."
   • If you chose Electronic statement upload, go to "Part 2b: To electronically reconcile the trust account."
     NOTE:  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.
     CAUTION:  If you are creating an electronic reconciliation, you cannot make adjustments during this workflow. Adjustments can only be made during a manual reconciliation. 

Part 2a: To manually reconcile the trust account:

1. Complete the steps outlined in Part 1, making sure to select Printed bank statement as your Statement format.
2. Enter a Closing balance, as shown on the statement. This is the amount the system will reconcile towards.
3. Click Next. The Reconciliation page appears.
   
4. For each transaction in the 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.
   
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. When you have matched all entries and the reconciliation is fully matched, click Fully Matched to proceed to the next step. Then proceed to "Part 3: Finish the reconciliation."

Part 2b: To electronically reconcile the trust account:

1. Complete the steps outlined in Part 1, making sure to select Electronic statement upload as your Statement format.
2. Enter a Closing balance, as shown on the statement. This is the amount the system will reconcile towards.
3. 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).
4. For Statement File field, click in the field to browse to and select the bank statement.
5. Click Save. The Reconciliation page appears.
6. 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.
7. Optionally, toggle between Actionstep View and Bank View to quickly identify which transactions are from missing from either perspective. 
8. When you have matched all entries and the reconciliation is fully matched, click Fully Matched . Then proceed to "Part 3: Finish the reconciliation." 

Part 3: To finish the reconciliation

1. Complete the instructions in Parts 1 and 2 above.
2. 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. 
3. Click Complete Reconciliation to lock it and prevent it from being edited any further.

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.

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 do this:

1. Complete a trust reconciliation, as described in "Creating a New Reconciliation," earlier in this article.
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. 
4. Provide the required information. 
   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 your adjusted transactions.
6. Click Save when you're finished. You are returned to the Reconciliation page where you can finish your work.