A Three Way Reconciliation is when your 1) Bank Statement, 2) Checkbook/Quickbooks, and 3) total of your individual client ledgers (Funds with Running Balances) all equal the same number, on the same day (adjusting for outstanding items).  

Hard to tell from your post why you should be off, but perhaps that helps.

Assuming that you are balancing the Quickbooks against the Bank Statement every month, does your Funds with Running Balances match the Quickbooks balance? I would start there.

Nancy Duhon, Esq.
Duhon Technology Solutions, LLC
Master Certified Consultant for Sage Timeslips
Providing individual Consultations and Third Party Remote Desktop Support - including older/unsupported versions.
404-325-9779
[email protected]

Hi Nancy, Yes, I reconcile both Operating and IOLTA every month and they are fine.

The only difference between the IOLTA in QB and the Funds with Running Balances report is the interest sweep in/out, which is not accounted for in Time Slips.

The balance between the TS report and QB was just the sweep amount.

I am following an "How to conduct a three-point reconciliation" document and I am wondering if ALL outstanding client balances should have been listed for the audit. We read it as we had to explain our deposits and disbursements for that time frame, which we did. But if they want to know who the additional balance belongs to, we did not do that and that would explain the roughly 22K difference.

The "interest sweep" should not be the difference because each month it is a net zero transaction:  interest is earned and removed at the same time, with no change to the balance.

Yes, you would need to show either the starting balance at the beginning of the time frame, or all previous entries for it to show the true total on had per client. That sounds correct. 

Basically, how much money are you holding total (bank and checkbook) and who does it all belong to (funds with running balances).

Not that you may need to include some closed clients as well if they had transactions in the period.  Some firms only run that report on Open Clients.

Nancy Duhon, Esq.
Duhon Technology Solutions, LLC
Master Certified Consultant for Sage Timeslips
Providing individual Consultations and Third Party Remote Desktop Support - including older/unsupported versions.
404-325-9779
[email protected]

Since he is transitioning to retirement, we did a huge payout on over 30 clients on one day during the reporting period. That resulted in 8 outstanding checks and a voided check. So yes we had closed accounts in there too. I just didn't run all the open ones, I only ran the report on the ones that had activity during that time.  :-/

To really do a 3 way verification you can’t look at activity you have to look at balances. You also have to take into account uncleared checks and deposits. 

Right but they asked for lists too.

How do I have Timeslips do a Client Funds with Running Balances report as of a certain date in the past?

If I run one for April without zero balances checked, I'm not getting the clients we zeroed out in June., even though they had a balance in April, even if I select a client specifically. It only works if I ask it to include zero balances, which takes a 9 page report to nearly 200 pages.

Instead of funds with running balance do a trust transaction list for the period. 

Funds Transaction Listing?  That doesn't show balances, just a list of transactions, and it still doesn't eliminate zero balance clients. I'll look for a Trust Transaction again

Let's back up a bit.  What did the Bar ask you to provide for the Audit?

Nancy Duhon, Esq.
Duhon Technology Solutions, LLC
Master Certified Consultant for Sage Timeslips
Providing individual Consultations and Third Party Remote Desktop Support - including older/unsupported versions.
404-325-9779
[email protected]

Hi all, sorry for disappearing. My client was away and the machine had a catastrophic hard drive failure while he was gone. He just got it back from the shop today and I was able to find the backup and install it on my machine for the time being. Side note - I'd like to put 2017 on his ancient machine but I can't find it to download. Do I have to call Sage? Not my most critical problem at the moment....

Issue #1 with the audit: They claim they didn't get all the documentation, yet I have the zip file he sent them and it's all there. They say they are missing the Timeslips portion and that's why they couldn't balance. So we will resend.

In the meantime we did find a couple of errors. I was advised to make corrections to the file as of Oct 31. which is the last day of the audit period. I have 3 checks that were payments on account and deposited into the Operating account correctly. But they were accounted in Timeslips in the funds account. This happened way before the audit period so I didn't pick that up originally.

All three clients are paid in full. I would think this is all set, but I have no entries in Timeslips showing the sweep of these funds out of the funds account and am unsure how to show that correctly. The clients do show a zero balance. Is it as simple as deleting the incorrect funds payment and then making the correct AR payment? 

Thanks for the help!