Two things keep a firm owner awake: whether the client account would stand up to being looked at, and what the practice is really earning once WIP, lockup and partner tax are honest. We do the client account bookkeeping, the reconciliations, the accounts, the tax and the partner drawings — and we arrange the annual SRA Accountant's Report with a registered auditor who prepares and signs it.
Sole practitioners, partnerships, LLPs, incorporated practices and chambers. Nothing else.
Ledgers by matter and a three-way reconciliation every five weeks, not a scramble in month eleven.
Rule 12.5 needs a registered auditor. Colin Ellis of Anstey Bond LLP prepares and signs it.
Quoted after a free review and agreed before we start. No hourly billing, ever.
Almost every conversation we have with a principal or a COFA starts in one of these two places. They are usually connected, and the root is usually the same: the ledgers are being kept up rather than being used.
Not "has anyone complained" — compliant. Rule 8.3 wants a three-way reconciliation at least every five weeks, signed off by the COFA or a manager. Rule 4.3 wants a bill or other written notification of costs out of the door before money moves to the office account, for the specific sum in that bill. Rule 5.3 means no client's money can fund another client's shortfall, even for an afternoon. Rule 2.5 wants money returned as soon as there is no longer any proper reason to hold it.
Firms rarely fail on intent. They fail because a reconciliation slipped to monthly, a transfer went out ahead of the bill, and six residual balances have been quietly rolling forward since a matter closed three years ago.
Support for COFAsProfit per equity partner is the number most firms quote and the number fewest have tested. Take the drawings out of it, look at what is tied up in unbilled work and unpaid bills, and the picture changes. Lockup is WIP days plus debtor days, and every extra month of it is cash the firm has earned and cannot spend.
Then there is the tax reserve. A partner's marginal cost on profit share is 40% income tax plus 2% Class 4 National Insurance above £50,270, and 45% plus 2% above £125,140 — so a firm reserving "about a third" is quietly under-reserving for its senior people.
Accounts and tax for firmsClient account bookkeeping and the five-weekly three-way reconciliation. The firm's annual accounts, the partnership or corporation tax return, partner tax reserves and drawings, payroll, VAT and the management figures you run the firm on. All the preparation that decides whether the report is clean.
Buzz Accounting Ltd is licensed by the AAT and a member of the ICPA. It is not a chartered accountancy firm and not a registered auditor.
Colin Ellis, ICAEW and a Responsible Individual, prepares and signs the SRA Accountant's Report itself. Rule 12.5 of the SRA Accounts Rules requires a member of ICAEW, ICAS, ACCA or ICAI who is, or works for, a registered auditor — and only that person can sign it.
Anstey Bond LLP is a separate firm, registered for audit by the ICAEW. Companies House OC360626.
We would rather say that on the homepage than have you discover it later. It is the same split we use at Buzz Legal, where a practising solicitor does the legal work and we do everything around it — and it is the arrangement most law firms end up with anyway, usually without anyone explaining it. How the two firms work together.
One team for the bookkeeping, the work around the Accounts Rules, the accounts, the tax and the partners' own positions — rather than three suppliers who each assume somebody else checked the client account.
Arranged with a registered auditor who prepares and signs it, and the client account work done properly all year so nothing surfaces late.
How the report worksClient ledgers by matter, the three-way reconciliation every five weeks, transfers evidenced against bills, residual balances cleared rather than carried.
Client account workAnnual accounts, the partnership or corporation tax return, WIP and lockup you can read, and management figures that arrive while they still matter.
Accounts and taxProfit shares, tax reserves, payments on account and a drawings policy that survives January rather than collapsing in it.
Partner taxFee earners and support staff, members caught by the salaried members rules, auto-enrolment and the RTI reporting HMRC expects on time.
Payroll for firmsThe arithmetic both ways, plus the SRA authorisation category and the minimum PII cover consequences that most comparisons leave out.
The structure questionHow Xero sits alongside a legal case management system, what it can and cannot do with client money, and the set-up that keeps you inside the rules.
Xero, set up properlyThe rules are the same size whoever you are. What changes is who has to carry them, and how much of the week that takes.
You own the firm, so you carry the Accounts Rules, the tax and the question of what the practice actually earns. All of it handled in one place.
Read moreYou are the fee earner, the COLP and the COFA, and you are also the person reconciling the client account at half past nine at night.
Read moreFive-weekly three-way reconciliations, residual balances, transfers evidenced against bills, and a breach record you can put in front of anyone.
Read moreMembers' capital and current accounts, profit allocation, the salaried members rules and partner tax reserves, read against your actual LLP agreement.
Read moreAged fee notes, the cash basis, VAT on fees and the tax cliff that arrives in the second year of practice rather than the first.
Read moreWorth ten minutes of anyone's time
A number of small firms obtain and pay for a report they are not required to obtain, and a smaller number assume they are exempt when they are not. The test is in Rule 12.2 and it is arithmetic, not judgement.
You are outside the requirement for an accounting period if either of these is true:
Rule 12.3 tells you what balance to measure: the total of all client accounts you hold or operate, plus any joint accounts and any clients' own accounts you operate as signatory, as shown by the statements you obtain under rule 8.2. That matters, and it is the part firms miss. The test is not run against the highest figure the account touched on some busy afternoon; it is run against the balances shown by the statements you obtain, on the dates you obtain them. And the average is not a year-end snapshot either. The SRA's own guidance is that you add up all of the reconciliation balances for the period and divide by the number of reconciliations — which is exactly why the firms that reconcile every five weeks, as the rules require, are the ones who can answer this question in an afternoon.
An illustrative example. A firm reconciling every five weeks has eleven reconciliation dates in a twelve-month accounting period. Say ten of those balances sit at about £9,000 and the eleventh, taken shortly after a completion, is £24,000. The total is £114,000, so the average is £10,364 and the firm is outside the exemption — despite a maximum balance of £24,000, nowhere near the £250,000 limb. The reverse case is rarer than firms assume, because the average is built from the same balances as the maximum: one £260,000 balance across eleven reconciliation dates is an average of over £23,000 on its own, before a single other figure is added. A firm has to reconcile far more often than the rules require before a one-off peak can sit inside a £10,000 average. In practice, for most firms, the average limb is the one that decides it.
Two things the exemption does not do. It does not stop the SRA requiring a report on reasonable notice under rule 12.4 — a firm that stops holding client money or closes generally needs a final one. And under the changes the SRA announced on 2 June 2026 that it has submitted to the Legal Services Board, exempt firms would have to provide information about their exemption status rather than simply saying nothing. Those rules are not in force: the SRA expects them by early 2027, subject to LSB approval.
The thresholds have applied to accounting periods ending on or after 1 November 2015 and have not moved since. If you are close to either limb, the answer is not to guess — it is to run the calculation on the reconciliations you already have. The health check asks the same questions in order, or we will do the arithmetic with you on a free review.
Rule 8.3 is the shortest route to knowing whether a firm's client account work is genuinely in order. At least every five weeks, for all client accounts held or operated, you reconcile three figures: the bank or building society statement balance, the cash book balance and the client ledger total. Two of the three is not a reconciliation. The record has to be signed off by the COFA or a manager of the firm, and any differences investigated and resolved promptly.
Each one answers a question a firm owner has actually put to us. Nothing is gated behind an email address, and every result can be printed or saved.
Twelve questions across the SRA Accounts Rules, and a red, amber or green picture of where your client account stands — with what to fix first.
Open the calculatorWIP days plus debtor days, and what every extra month of lockup is costing the firm in cash and in the interest paid to fund it.
Open the calculatorProfit share in, tax reserve out, and the monthly drawings the firm can sustain — including the payments on account that catch new partners in their second year.
Open the calculatorPartner tax in an LLP against corporation tax plus extraction from a company, on 2026/27 rates including the dividend increase from 6 April 2026.
Open the calculatorNot for a regulator, and not for a general small business. Rule references, real dates and the arithmetic worked through.
Who needs one, the six-month deadline, when it goes to the SRA, what makes it qualified, and what changes once the Legal Services Board has looked at the June 2026 rules.
Read the guideWhat rule 8.3 actually asks for every five weeks, how to sign it off, and which differences mean something rather than nothing.
Read the guideWIP days plus debtor days, why lockup is the number partners feel and rarely measure, and where a month of it usually hides.
Read the guideNo, and neither can any accountant who is not a registered auditor. Rule 12.5 of the SRA Accounts Rules requires the report to be prepared and signed by an accountant who is a member of ICAEW, ICAS, ACCA or ICAI and who is, or works for, a registered auditor. We are licensed by the AAT and a member of the ICPA, which meets neither limb. So the report is prepared and signed by Colin Ellis of Anstey Bond LLP, ICAEW and a Responsible Individual. We do everything around it: the client ledgers, the five-weekly reconciliations, the accounts and the tidying up that decides whether the report is clean when it is written.
Only if you held or received client money during the accounting period, or operated a joint account or a client's own account as signatory. Even then, rule 12.2 exempts you if all the client money came from the Legal Aid Agency, or if the statement or passbook balance of client money did not exceed an average of £10,000 and a maximum of £250,000. Both limbs have to be satisfied, not one. The average is not a year-end snapshot: you add up all the reconciliation balances for the period and divide by the number of reconciliations. We work that out for a firm before anyone talks about engaging an auditor.
Rule 12.1(a) gives you six months from the end of the accounting period to obtain it. You deliver it to the SRA only if it is qualified to show a failure to comply such that client or third party money is, has been or is likely to be put at risk, and qualified reports go in through mySRA on form AR1 rather than by email. That is the position today, and it is changing: on 2 June 2026 the SRA announced that it has submitted rules to the Legal Services Board that would make every firm holding client money submit its report. Subject to LSB approval, the SRA expects them in force by early 2027.
No, and no date has been set. HMRC's published position is that partnerships will need to use Making Tax Digital for Income Tax in future and that the timeline will be set out later. A partner's share of the firm's profits is not qualifying income for their own MTD test either, so an equity partner in an LLP has no MTD obligation from April 2026 unless they have separate self-employment or property income over the threshold — over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. Making Tax Digital for VAT is a separate regime and already applies to every VAT-registered firm.
A package the SRA announced on 2 June 2026 that it has submitted to the Legal Services Board. Every firm holding client money would submit its accountant's report, not only the firms whose report is qualified; exempt firms would instead provide information on their exemption status; the COFA would sign an annual declaration; reporting accountants would submit reports directly to the SRA with a copy to the COFA; and fixed penalties would extend to late or missing submissions. Firms with turnover over £600,000, or holding more than £2m of client money, would have to keep the COLP and COFA roles apart from the people making significant decisions about how the firm is run.
The SRA regulates solicitors in England and Wales only, so the Accounts Rules references on this site do not apply to you. Firms in Scotland are regulated by the Law Society of Scotland, where the annual obligation is an Accounts Certificate delivered to the Society. Firms in Northern Ireland are regulated by the Law Society of Northern Ireland under the Solicitors' Accounts Regulations 2014, where an accountant's report is delivered to the Society under Part F. Neither is the SRA's regime, and neither is an SRA Accountant's Report. The accounting and tax side travels perfectly well: partnership and company accounts, partner tax reserves, payroll, VAT and lockup are the same problems wherever the firm sits. We will say plainly which parts of the compliance work apply to you before you engage us.
A fixed monthly fee, quoted for your firm after a free review and agreed before anything starts. No hourly rates, and no invoice you were not expecting. What it depends on is the size of the firm, how many live matters the client ledgers carry, whether we are doing the bookkeeping or checking work your own team does, and how many partners need tax returns. The SRA Accountant's Report itself is a separate engagement with the registered auditor who signs it, and it is quoted separately. We never fold it into our fee or suggest that it comes free with the accounts.
A free review of where your client account and your firm's numbers actually stand. If your current accountant is doing it well, we will tell you that and leave you alone.
One short email: what has changed in the Accounts Rules, the dates coming up, and one number worth checking in your firm. No spam, unsubscribe any time.