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How to Perform A Three Way Reconciliation

Updated: Apr 5, 2023

If your firm operates any trust accounts, the State Bar will require you to perform something called a three-way reconciliation periodically, most likely very 30-60 days.

A three-way trust reconciliation involves three components that must match:

  • Bank Account Balance (Trust Bank Statement)

  • Book Balance (Trust Ledger)

  • Balance By Matter (Client Ledgers)

Let's dive into how to perform a three-way reconciliation.

three way reconciliation - bookkeeping services

The bottom line

A three-way reconciliation is important because it ensures that you can identify any unusual transactions caused by fraud or accounting errors. As a law firm owner, the practice can help you manage your cash flow and spot any inefficiencies.

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