A month-end close checklist for law firms
Closing the books each month means confirming every account is complete and correct for that month, then producing reports. For law firms the close has a few extra steps because of client funds. Here is the sequence many firms follow.
1. Reconcile trust first
Complete the three-way reconciliation for each trust account and review client ledgers for negative or stale balances. Document it, since many state bars expect records to be kept for several years.
2. Move earned fees and reconcile operating
Transfer fees that were earned and billed during the month from trust to operating, with a clear reference to each client. Then reconcile operating bank and credit card accounts and review uncategorized transactions.
3. Review receivables, costs and payroll
Check aging on unpaid invoices, confirm advanced client costs are recorded for recovery, and make sure payroll and owner draws are posted to the right accounts.
4. Produce and read the reports
A profit and loss statement, balance sheet and trust summary are the usual core. The close is only useful if someone reviews them, so firms often set a short monthly review with the attorney or partner group.
What to check
- The date by which the close is finished each month
- Who signs off on the trust reconciliation
- Which reports are reviewed and by whom
- Whether stale client balances are followed up
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Frequently asked questions
How quickly should a law firm close its books?
There is no single rule, but many firms aim to finish within roughly two weeks of month-end so the numbers are still useful for decisions.
Is this law firm bookkeeping guide advice?
No. Sam's List writes these guides for education. They describe common questions and processes, not advice for your specific situation.
Sam's List is a directory. Listing or paid status does not imply endorsement or ranking.