Home Page Compli-Forum Accounts Rules Suspense Accounts

Viewing 2 reply threads
  • Author
    Posts
    • #10951
      David
      • 35

      Good evening all,

      Is there anything in the Accounts rules guidance anywhere regarding the length of time we can keep unidentified monies in the client suspense account? What is the SRA stance?

    • #10998

      Hi David,

      The rules themselves don’t specifically mention the use of suspense accounts, but of course the longer you use a suspense account the harder it will be to comply with the main body of the rules, particularly rule 8. You’re also likely to find it harder to apply a lot of the best practice outlined in the Keeping Accurate Client Records guidance note (https://www.sra.org.uk/solicitors/guidance/accurate-client-accounting-records/)

      Whilst the rules themselves don’t mention suspense accounts specifically, the SRA’s guidance to reporting accountants has a section on it: https://www.sra.org.uk/solicitors/guidance/planning-completing-accountants-report/ (See 3.10 Suspense Ledgers). In there, they outline the following:

      Guidance – indicative of firm with above adequate processes and controls:
      Where suspense accounts are used, items are usually no more than, for example, 5 working days old.

      Guidance – indicative of a firm with adequate processes and controls:
      Where a suspense account is used, items are usually no more than, for example, 30 working days old.

      Guidance – indicative of a firm with below adequate processes and controls that may lead to a qualification of the reporting accountant’s report:
      Widespread unjustified use of suspense accounts.
      No process for clearing suspense accounts or outstanding items not followed up.

      Of course the above is just guidance but hopefully it gives you an idea of the type of parameters to work within. Ultimately the question of whether your use of suspense accounts is “improper” or not will come down to your policies and procedures – do you have a written policy on how long you will keep funds on the suspense account? Do you have a written process for how the funds will be dealt with & what investigations will be made into the balances? Don’t forget to make sure any AML considerations are also covered off in your written policies on this.

      Best wishes
      Liz

    • #11015
      David
      • 35

      Hi Liz,

      Thanks for your really comprehensive reply – I really appreciate it. It definitely helps.

      David

Viewing 2 reply threads
  • You must be logged in to reply to this topic.