How to be SRA Accounts Rules compliant part 2: 6 ways Osprey can help law firms manage client residual balances 

Residual client balances often pose compliance challenges for law firms, requiring careful management to ensure adherence to the SRA Accounts Rules. These balances, which typically remain unclaimed after the conclusion of a matter, can arise from overpayments, unbilled disbursements, or rounding discrepancies. Improper handling of these funds can result in regulatory breaches and reputational harm. 

Osprey Approach is designed to support law firms in managing client money efficiently and compliantly. Below, we explore six ways Osprey helps firms address client residual balances while reducing administrative workload and maintaining trust. 

For SRA Account Rules, click here.

How to stay compliant with the SRA Account Rules

1. Tracking of residual balances 

Residual balances can easily go unnoticed without a systematic approach. Osprey’s integrated accounts and billing system ensures that unclaimed funds are not overlooked. When archiving a matter, the system provides a red warning if a balance remains, along with a ledger balance summary, allowing firms to promptly identify and resolve residual balances before proceeding. 

For instance, when a caseworker closes a file, Osprey’s workflows can include a file-closing task prompting staff to check the financial ledger for any outstanding balances. This ensures that any residual balances are identified and addressed at the point of closure, mitigating compliance risks. 

By automating the tracking of residual balances, Osprey simplifies a traditionally manual and error-prone task, saving valuable time for staff and ensuring compliance with regulatory expectations. 

2. Customisable client communication templates 

Clear, professional communication with clients about residual balances is key to maintaining transparency. Osprey enables firms to create tailored templates for letters and emails in just a few minutes, streamlining the process of notifying clients about unclaimed funds and ensuring compliance with the SRA Accounts Rules. 

For example, firms can use templates for: 

• Final invoices: To explain the breakdown of costs and any remaining balance. 

• Refund notices: To inform clients of the steps required to return funds. 

• Follow-up reminders: To contact clients who have yet to claim their balances. 

These templates standardise client communication, ensuring consistency across your firm and reducing the likelihood of errors. Additionally, they can be automatically generated and tracked through Osprey, ensuring a seamless communication process. 

5. Reporting tools to support internal reviews 

Regular reviews of client accounts and financial records are necessary to identify and resolve residual balances promptly. Osprey’s robust reporting tools make this process straightforward. 

Firms can generate customised reports that: 

• Highlight unclaimed balances across all matters. 

• Categorise balances by age, helping prioritise older cases. 

• Track the progress of resolving residual balances over time. 

These reports provide practice managers and compliance officers with actionable insights, enabling them to proactively address issues before they escalate. Additionally, Osprey’s integration with reporting tools like Power BI allows firms to create advanced visualisations for a comprehensive overview of financial compliance. 

6. Comprehensive client fund workflows 

Ensuring consistency in managing residual balances is essential for compliance and efficiency. With Osprey’s flexible workflow capabilities, firms can create bespoke workflows tailored to the management of client funds. Our professional services team is available to help set up these workflows, ensuring your processes are streamlined and compliant with SRA regulations. This proactive approach helps law firms manage residual balances effectively while maintaining high standards of professionalism. 

Key elements of these workflows include: 

• File closure reviews: Ensure all client accounts are reconciled and residual balances are flagged. 

• Client notifications: Automate the communication process to inform clients about unclaimed funds. 

• Fund resolution actions: Provide clear steps for refunding balances, transferring funds with client authorisation, or applying funds in accordance with SRA guidance. 

By standardising these processes, Osprey minimises the risk of human error and ensures compliance with SRA regulations. 

How Osprey helps law firms maintain SRA Accounts compliance

Handling client residual balances is a critical aspect of compliance with the SRA Accounts Rules. Firms must adopt proactive measures to identify, communicate, and resolve unclaimed funds promptly to avoid regulatory breaches and protect their reputation. 

Osprey Approach provides law firms with the tools needed to streamline the management of residual balances, from automated tracking and client communications to advanced reporting and workflow integration. By incorporating Osprey into your practice, you can reduce administrative burden, enhance compliance efforts, and demonstrate a commitment to safeguarding client funds. 

Book a consultation to discover how Osprey Approach can help you effectively complete client and matter risk assessments across your teams. 

For further advice and best practices you can view parts one and three of our SRA accounts rules guides:

How to be SRA accounts rules compliant part 1: A guide to client residual balances | Osprey Approach | All-In-One Conveyancing & Compliance Software

Disclaimer

This guide is not intended as legal advice. For detailed guidance on the SRA Code of Conduct, please visit the official SRA website.