Residual client ledger balances - the COFA’s first nightmare?
There are very few firms that do not have a problem, to a greater or lesser extent, with old residual balances within their clients’ ledger. For many, these balances may only be a few pounds or even a matter of pennies but, even so, they can cre-ate very real compliance problems under the SRA Accounts Rules.
Certainly, it is one of those areas, for anybody who has been nominated to act as the Compliance Officer for Finance and Administration (COFA), or is considering accepting such an appointment, that could cause a few sleepless nights.
Our experience indicates that many firms that have yet to grasp the nettle and do anything about the ongoing build-up of residual balances on their clients’ ledgers despite the rules having changed as long ago as July 2008.