Client Ledger

What is a client ledger?

A client ledger is a detailed record of all financial transactions related to a specific client, particularly for funds held in trust. For law firms and other professionals holding client money, the client ledger tracks deposits, disbursements, and the current balance for each client. Accurate client ledgers are essential for trust account compliance and answering the question of exactly how much of the trust account belongs to each client.

Maintaining accurate client ledgers

Record transactions promptly. Include the date, amount, description, and resulting balance. Each deposit and disbursement should reference supporting documentation. Never allow a client ledger to go negative; that indicates you have disbursed more than that client deposited. Reconcile client ledgers to the overall trust account regularly. Modern practice management software automates much of this, but you remain responsible for accuracy.

Client ledgers in trust reconciliation

The sum of all client ledger balances should equal the bank balance minus any items in transit. This is the core of three-way trust reconciliation. If totals do not match, something is wrong. Either a transaction was recorded incorrectly, assigned to the wrong client, or missed entirely. Client ledger discipline prevents the panic of discovering mismatches during bar audits or when clients demand their funds.