Law Firm Check Reconciliation: How to Compare Issued and Cleared Checks

Law firms may issue checks for operating expenses, case-related costs, expert fees, vendors, settlements, reimbursements, and other payments.

The check may be recorded when it is written, but the corresponding amount is reflected in the bank account only when the check is deposited and cleared.

This creates two separate records:

• The firm's record of checks issued
• The bank's record of checks cleared

Law firm check reconciliation compares these records and identifies which checks cleared correctly, which remain outstanding, and which transactions require further review.

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Why law firms need check reconciliation

A check register shows payments the firm intended to make.

The bank statement shows payments that were actually processed.

These records may differ because:

• A check has not yet been deposited
• A check was voided or replaced
• A check cleared in a later month
• The check amount differs from the bank-cleared amount
• A check appears in the bank but not in the internal register
• The same check number appears more than once
• Historical records are incomplete
• Different systems were used to prepare and record checks

Without reconciliation, a firm may not have a clear view of which issued checks are still outstanding and which exceptions require investigation.

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What data should be compared?

A law firm will usually need two files.

Issued-check register

The issued-check file may come from:

• Check-printing software
• Accounting software
• Practice-management software
• An internal spreadsheet
• A check provider
• An ERP or bookkeeping system

Useful fields include:

• Check number
• Issue date
• Payee
• Amount
• Bank account
• Matter or case reference
• Payment description
• Check status
• Internal transaction reference

Cleared-check data

The bank file may contain:

• Check number
• Cleared date
• Cleared amount
• Bank account
• Transaction description
• Bank reference
• Check image reference

Excel or CSV exports are preferable because each check can be compared as a separate transaction.

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Recommended matching logic

The check number is normally the primary identifier.

However, check number alone may not be sufficient. The reconciliation should also compare the amount and bank account where applicable.

A typical matching rule is:

Issued check number equals cleared check number, and issued amount equals bank-cleared amount.

The issue date and cleared date should not normally be required to match exactly.

A check may be written on one date and cleared several days or weeks later.

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Common law firm check reconciliation results

Matched checks

The check number and amount agree in both sources.

These checks generally require no further review.

Issued but not cleared

The check appears in the firm's records but is absent from the bank transactions.

Possible explanations include:

• The recipient has not deposited the check
• The check was lost
• The check was voided
• A replacement check was issued
• The bank data does not cover the required period
• The check remains legitimately outstanding

Cleared but not found in the firm's records

The bank shows a cleared check, but no corresponding issued record is available.

This may result from:

• An incomplete internal export
• A check created outside the usual process
• An incorrect check number
• A transaction belonging to another account
• Missing historical data
• A record that requires further investigation

Amount mismatch

The check number exists in both files, but the amount differs.

Amount differences should be reviewed using the original check record, bank transaction, and available supporting documents.

Duplicate check number

The same check number appears more than once.

Possible causes include:

• Duplicate data entry
• Reissued checks
• Overlapping check sequences across bank accounts
• Multiple exports containing the same transaction
• Incorrect historical data

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Law firm payments that may appear in the reconciliation

Depending on the firm's activities, checks may relate to:

• Court filing fees
• Expert witness fees
• Medical-record fees
• Investigation expenses
• Process servers
• Vendors
• Office expenses
• Client reimbursements
• Settlement-related payments
• Referral payments
• Payroll or contractor payments
• Insurance and professional fees

Retaining the payee, matter reference, and payment description helps reviewers understand the purpose of each exception.

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How to perform a law firm check reconciliation

Step 1: Export the check register

Obtain the full list of checks issued for the required period.

Include check status, payee, amount, and bank account wherever possible.

Step 2: Obtain cleared-check data from the bank

Download or request the relevant bank transactions in Excel or CSV format.

If the online banking portal does not provide the complete history, request a historical transaction export from the bank.

Step 3: Confirm the reconciliation period

Decide whether the exercise covers:

• One month
• One year
• Several historical years
• All available check history

The bank file may need to extend beyond the check-issue period because some checks clear later.

Step 4: Standardize the check numbers

Ensure check numbers are formatted consistently.

Examples of formatting differences include:

• 001025 in one source and 1025 in another
• Check numbers stored as text in one file and numeric values in another
• Extra spaces
• Prefixes added by the bank
• Check numbers embedded in transaction descriptions

Step 5: Standardize the amounts

Remove currency symbols, convert text values to numbers, and ensure debits and issued amounts use a consistent sign convention.

Step 6: Run the matching rules

Match the check number, amount, and bank account.

Step 7: Review exceptions

Separate outstanding checks, bank-only checks, amount mismatches, and duplicates.

Step 8: Record the resolution

Add notes explaining whether each exception was:

• Valid
• Voided
• Replaced
• Corrected
• Still outstanding
• Referred for further review

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Why accounting software may not complete the reconciliation

Accounting software may include standard bank-reconciliation functionality, but results depend on how the check data was recorded and imported.

A separate reconciliation may still be required when:

• The check register is maintained outside the accounting software
• Historical check data was not imported
• The bank feed covers only recent periods
• Transactions were entered inconsistently
• The firm needs a row-by-row exception report
• Several years of records must be compared
• The earlier reconciliation was never completed

In these situations, comparing the source files directly can provide a clearer result.

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Reconcile law firm checks with Cointab

Cointab can compare a law firm's issued-check file with cleared-check data received from the bank.

The reconciliation can identify:

• Checks matched by number and amount
• Outstanding issued checks
• Cleared checks missing from the internal register
• Amount differences
• Duplicate check numbers
• Other exceptions based on the firm's data

Once the matching logic is validated, the same setup can be reused for future monthly reconciliations.

This allows the firm to complete a historical review and then continue with a repeatable monthly process.

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Frequently asked questions

Can several years of law firm checks be reconciled?

Yes. Historical checks can be reconciled for any period for which the issued-check and bank data are available in a usable format.

Should a law firm reconcile checks monthly?

Monthly reconciliation is common, although the appropriate frequency depends on the account, transaction activity, and the firm's internal procedures.

Can outstanding checks from earlier months be carried forward?

Yes. Checks that have not cleared can remain open and be matched against bank activity in a later period.

What if the bank provides only PDF statements?

The firm should ask whether historical transactions can be provided in Excel or CSV format. Structured files are easier to reconcile reliably than PDF statements.

Can checks from multiple bank accounts be reconciled?

Yes. The bank account should be included in the matching logic, or each account can be reconciled separately.

Is every unmatched check an error?

No. Timing differences, voided checks, incomplete exports, and delayed deposits may all create unmatched records. Each exception should be reviewed before a conclusion is reached.

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Create a repeatable law firm reconciliation process

Law firm check reconciliation connects the firm's payment records with the transactions processed by the bank.

A structured process helps the firm identify:

• Checks that cleared correctly
• Checks that remain outstanding
• Checks with amount differences
• Bank transactions missing from internal records
• Duplicate or incomplete data

Cointab helps law firms organize these results and reuse the same reconciliation logic for future periods.