SRA Accounts Rules — Accountant's Report & Compliance

SRA Accounts Rules Legal Law Firm Management United Kingdom Client Money Regulatory

Overview

The SRA Accounts Rules skill helps law firm COFAs, practice managers, and reporting accountants draft and validate the two key compliance documents under the SRA Accounts Rules 2019: the Accountant’s Report (Rules 12–13) submitted to the SRA, and the firm’s internal compliance manual governing day-to-day handling of client money. It includes two validation tools — one for overall Accounts Rules coverage and one focused on the timely return of residual client balances — plus structured templates and a reference file covering the full rule set.

Getting Started

Upload your existing accounts procedures, policy documents, or previous Accountant’s Reports to the project workspace, then activate the SRA Accounts Rules — Accountant’s Report & Compliance skill. The agent will gather your firm details (SRA number, COLP, COFA, reporting accountant), classify the task, draft or update the relevant document using the built-in templates, and validate it against the SRA Accounts Rules. The result is a structured document ready for internal review, reporting accountant sign-off, or SRA submission.

Example Conversation

Below is an example of how a typical session for drafting an internal compliance manual and validating it might unfold.

You: We need to create an internal compliance manual for the SRA Accounts Rules. We’re a mid-size firm — Hartwell & Crane LLP, SRA number 654321. Our COLP is David Hartwell and COFA is Priya Sharma. We bank with NatWest. We’ve had some issues with old client balances sitting on ledgers and want to make sure the manual covers that properly.
Agent: I’ll create the compliance manual for Hartwell & Crane using the template, with particular attention to the residual balance procedures. Let me set it up with your details.
I’ve drafted the full compliance manual. Given your concern about old client balances, I’ve included detailed residual balance procedures with a 14-day return window post-matter completion, a quarterly register review, and an untraceable client process. Let me validate it now.
sra_financial_policer run on the compliance manual:
Client money definition: 4/4 (100%)
Client account requirements: 4/4 (100%)
Segregation duties: 4/4 (100%)
Costs transfer: 2/3 (67%) — missing: agreed fees / money on account of costs procedure
Third party managed accounts: 0/2 (0%) — not applicable if not using TPMA
Breach and reporting: 3/3 (100%)
Accounting records: 4/4 (100%)
Interest: 2/2 (100%)
Accountant’s report: 3/3 (100%)
Overall: 85% — PASS WITH WARNINGS
residual_balance_checker run on the manual:
Return policy: [OK]
Timescales: [OK] — 14 days specified
Untraceable client procedure: [OK]
De minimis threshold: [OK] — £50
Residual balance register: [OK]
Charity payment: [OK]
Regular review cycle: [OK] — quarterly
RESULT: PASS — 100% coverage
Two items to address:
Add a paragraph on handling agreed/fixed fees received before billing (they remain client money until a bill is delivered).
The TPMA section shows 0% — if you don’t use third party managed accounts, I’ll add a note that Rule 5 is not applicable. If you do, I’ll expand this section.
You: We don’t use TPMAs. Please add the agreed fees paragraph and mark TPMA as N/A.
Agent: Done. Re-running validation:
sra_financial_policer: 28/29 items covered (97%) — PASS. The TPMA section is correctly noted as N/A. Your compliance manual is ready for review by Priya Sharma (COFA) and David Hartwell (COLP).

Document Excerpt

Below is a representative excerpt from an internal compliance manual produced with the help of this skill.

SRA Accounts Rules — Internal Compliance Manual — Hartwell & Crane LLP (Excerpt)

SRA Number: 654321 COFA: Priya Sharma Version: 1.0 — February 2026

8. Residual Client Balances

Policy: Client money must be returned promptly when there is no proper reason to hold it (Rule 2.5).

Step	Action	Timescale	Responsible
1	Review client ledger balance on matter completion	Within 5 working days	Fee earner
2	Return residual balance to client	Within 14 days	Cashier
3	Written notification to client	Same day as return attempt	Cashier
4	Follow-up if no response	28 days after first notification	Cashier
5	Untraceable client: record trace efforts	Ongoing	COFA
6	Payment to charity (last resort)	After 12 months of trace efforts	COFA approval required

De minimis: Balances below £50 are handled under the simplified return procedure — a single notification by email with funds returned by cheque or BACS to the client’s last known bank details.

Register: The COFA reviews the residual balance register quarterly and reports to the partnership on aged balances.

This excerpt is illustrative. Final content must reflect the firm’s specific policies, banking arrangements, and client base.

Extension Tools

The skill includes two extension tools that automate compliance validation and residual balance checking.

sra_financial_policer

Scans a law firm’s procedural manual or compliance document and validates coverage of the SRA Accounts Rules 2019.

Check Area	What It Validates
Client money definition (Rule 2.1)	Client money/funds definition, office money distinction, money held on behalf, mixed receipts handling.
Client account (Rule 3)	Client bank account, separation from office account, approved institution, account naming.
Segregation duties (Rules 4.1–4.3)	Duty to keep separate, prohibition on own-use, prompt deposit, withdrawal for proper purposes only.
Costs transfer (Rule 4.3)	Billing before transfer, bill delivery, agreed fees / money on account.
Third party managed accounts (Rule 5)	TPMA reference, SRA authorisation.
Breach and reporting (Rules 6–7)	Breach/shortfall identification, prompt correction, material breach reporting to SRA.
Accounting records (Rule 8)	Records maintenance, client ledger/cash book, reconciliation, retention (6 years).
Interest (Rule 2.2)	Interest policy, fair sum of interest.
Accountant’s report (Rules 12–13)	Report requirement, qualified accountant, reporting period.

sra_financial_policer path="compliance_manual.md"

residual_balance_checker

Flags policies that do not adequately address the timely return of client funds under Rule 2.5 and SRA guidance.

Check	What It Flags
Return policy	Whether the document includes a policy on returning residual client balances.
Timescales	Whether concrete timescales are specified (e.g. within 28 days of matter completion).
Untraceable client	Whether there is a procedure for clients who cannot be traced.
De minimis threshold	Whether a threshold for small balances is defined.
Residual balance register	Whether a register or tracking mechanism is described.
Charity payment	Whether there is a procedure for paying unclaimed balances to charity as a last resort.
Regular review cycle	Whether a periodic review of residual balances is specified.

residual_balance_checker path="accounts_policy.md"

Interpreting Results

RESULT: PASS — The document adequately covers the checked requirements. Review any INFO notes before finalising.
RESULT: PASS WITH WARNINGS — Coverage is reasonable but gaps exist. Address warnings to strengthen the document.
RESULT: GAPS FOUND — Significant gaps in coverage. Fix all ERROR findings before submitting or approving the document.

These tools provide a structural pre-check — they do not replace legal advice or the judgment of a qualified reporting accountant.