Every law firm authorised by the Solicitors Regulation Authority (SRA) has a mandatory requirement to comply with the SRA Accounts Rules.
Breaches aren’t just a small firm problem, despite the popular assumption it’s SMEs who are the riskiest. Breaches aren’t just a big firm problem either, although these are the businesses where the stakes are highest and implications furthest reaching.
The steps to compliance
So, what do you need to do to keep your accounts clean, pristine and secure? Here are a few tips to help you out:
Top Tip #1: Make sure your financial management processes are robust
Clearly documented, robust accounting controls, which are not just ‘assumed’ to be happening, but are checked by an internal audit function, go a long way towards compliance. From reconciling bank accounts at least every five weeks, to scrutinising unidentified transactions, ensure you perform the right steps at the right time in the right way. It begins by understanding the SRA Accounts Rules thoroughly and introducing better processes for assured regulatory compliance. To achieve this goal, training of ALL staff, not just cashiers, is absolutely essential.
Top Tip #2: Assign roles, responsibilities and authorities
Trickier for smaller-sized law firms with fewer staff, if you’re able, designate specific cashiering-related duties to different people – for example, someone entering accounts data, another processing payments, another reconciling your bank accounts etc. On top of this, set up controls in the form of authorisation levels. Systems permissions are a great way to create boundaries and prevent corruption.
These combined best-practice methodologies, cross-referencing checks and layers of approval act as a deterrent or, at the very least, allow you to notice anomalies before it’s too late.
Top Tip #3: Run an accounting health check
Comprehensive health checks reveal vital business intelligence and compliance insights. Many of the problems referenced above would be identified and headed off at the pass with this type of measure.
Recognising you may not possess these skills in-house, it’s worth knowing consultancies such as MGT Silver Throne perform health checks day in, day out. Thanks to our health check’s thorough financial review, detailed compliance analysis, reassuring reconciliation verification, helpful audit preparation and easy-to-implement actionable report, your accounts will be shipshape in no time.
Top Tip #4: Report breaches accurately and promptly
While minor compliance failures only need to be recorded in-house by your COLP or COFA, serious breaches must always be reported to the SRA. The SRA’s Code of Conduct dictates whether a breach is considered reportable or not and you’ll need to apply your professional judgement too. Remember to strike the correct balance between reporting trivial oversights unnecessarily and withholding information about grave matters. The latter scenario will cause the SRA to come down much harder on the law firms and individuals concerned.
Top Tip #5: Carry out a best-practice study
Combining #1 to #4, tap into the expertise of external legal-specialist consultants and trainers like MGT Silver Throne to take a close look at your existing processes, and recommend improvements to and restructuring of day-to-day, month-end and year-end procedures – for optimum outcomes and guaranteed compliance.
These best-practice advisory services are not simply about showing which buttons to press in your legal accounting and case management software. It’s a consultative approach to making crucial changes to your internal operations – so you can run a first-rate accounting function that industry regulators will approve of.