A ‘reconciliation’ is an accounting procedure that will provide you with a measure of assurance that your trust transactions have been recorded accurately and will show you whether your records agree with the records of your financial institution. Each month, you will receive a statement from your financial institution either online or in paper form that will show all of the deposits and withdrawals in the account during the month as well as the balance remaining in the account. You will gather your trust receipts book, trust deposit book, cancelled cheques, the monthly bank statement, and trust journal and trust ledger. You will also prepare a client trust listing for the period - this is a list of trust balances you are holding separately for each client.
The reconciliation must be done monthly within thirty days from the date that your bank statement is available. You should make it a habit of recording the date you complete the reconciliation. If your trust account is audited, the auditors will want to verify that you have completed the reconciliations within the required time frame.
Paragraph 2(1) (h) of the Rules requires that your reconciliation include:
a record showing a comparison made of the total balances held in all trust accounts and the total of all unexpended balances of funds held in trust for clients as they appear in your books and records;
a detailed listing for the month, showing the amount of trust money you hold in trust for each client and identifying the client; and
a detailed reconciliation made monthly of each of your trust accounts.
You must keep these reconciliation records for at least seven years.