Six most common SRA Accounts Rules breaches and how to avoid them

We know that running a law firm comes with constant responsibility and managing client money is one of the most scrutinised areas of all.

The Solicitors Regulation Authority (SRA) has clear expectations of its Accounts Rules, yet many firms still encounter the same recurring issues.

These breaches are often not intentional and can happen when systems are not followed consistently or when teams are stretched too thin.

When you have a better understanding of the most common pitfalls, you can hopefully spot them before they become a full-on breach.

Residual client balances building up

One of the most frequent breaches we see is firms holding onto residual client balances for too long.

Once a matter has concluded, there is rarely a valid reason for you to retain funds.

However, if you fail to regularly review your client balances, then small balances can quietly accumulate over time.

This can soon become a regulatory concern if it is not addressed promptly and with clear evidence of your attempts to return the funds.

Inaccurate or delayed ledger records

Another common issue lies in inaccurate or delayed ledger postings.

When transactions are not recorded in real time or in the correct chronological order, it can become difficult to understand the true position of a client account.

This can cause errors in payments and lead to even further breaches that could have been avoided with better processes and oversight.

Delays in transferring client funds

We regularly see delays in transferring funds from client account to office account.

Once fees have been billed, the funds need to get moving as any repeated delays can raise concerns and create unnecessary compliance risks for your firm.

Client money held in the wrong account

Holding client money in the office account, even briefly, is another area where firms can fall short.

When the boundary between client and business funds becomes blurred, even unintentionally, it can lead to serious regulatory scrutiny or undermine trust in how funds are being handled.

Improper withdrawal of client funds

Perhaps one of the most serious breaches is improper withdrawal of client funds.

Sometimes this is the result of genuine human error around duplicate payments or incorrect postings.

However, even minor mistakes can create shortfalls and have consequences if they are not spotted and corrected quickly.

Inconsistent client interest policies

Some of the most common breaches arise when firms struggle to calculate or pay client interest consistently in line with their published interest policy.

Interest policies that are applied inconsistently can quickly become a recurring issue during your compliance reviews.

How can we help you stay compliant?

Most breaches can be avoided with the right controls, regular monitoring, defined responsibilities and early support.

Our professional team can conduct partner-led SRA compliance reviews and ensure you are conducting timely movements and reconciliations.

We can also advise on drafting or reviewing interest policies and provide reassurance that your firm is operating in line with SRA’s expectations.

Let us focus on keeping you compliant and you can focus on running your firm without the worry of breaches filling your mind.

For further support or advice on SRA breaches, get in touch.