Although you probably already have excellent systems and procedures in place, there are still actions you can take to ensure a smooth year end visit:

Have you ensured that your three way client account reconciliations (carried out at least every 5 weeks) have been signed off by the COFA and any differences investigated and resolved promptly (SAR 8.3)?

1. Have you reviewed your bank reconciliation for old outstanding cheques to review why they are not clearing the bank and taking appropriate action?  There could be the possibility of a residual balance issue, if they are very slow moving.

2. Have you reconciled your client own accounts, joint accounts and trustee accounts?  These can often get missed as they do not have ledgers and are not part of the main reconciliation.  However, under the new rules you are required to reconcile them at least every five weeks and if this is not possible, at least record the transactions.

3. Have you dealt with the residual balances that your systems and procedures have identified during the period in accordance with SAR 2.5 (client money is returned promptly when there is not a proper reason to hold it) & 5.1(c) (withdraw funds in prescribed circumstances) and guidance on withdrawing funds? 

4. You may have split these into two sections – current and historic balances.  As long as you are dealing with the current balances, have a plan in place and are ‘chipping away’ at the historic balances this is acceptable.  The important thing is that they cannot be ignored.

5. Have you reviewed any suspense accounts and ensured that they have been used only in very limited circumstances for unknown funds, and then transferred to the correct client ledger?  All client funds should have their own ledger represented by their name and description of the matter (SAR 8.1(a))

6. Have you ensured that your breaches log is completely up to date and all details and actions taken have been updated?

7. Have you reviewed last year’s management letter (if you received one) to check if you have taken on board and implemented, if necessary, any recommendations to changes in systems and procedures?  This is something that an Accountant will always check.



Most Accountants will also send you a pre-planning letter together with a call or visit to discuss the information that will be required before the start of the visit.  This usually centres on any major developments or changes during the year.