A three-way reconciliation only works when all three numbers are in a form you can actually compare. The bank side usually arrives as a PDF statement, which means somebody keys it or squints at two screens. BankXLSX turns that trust account statement into Excel or CSV with the date, description, amount, and running balance in separate columns, so you can match it line by line against the trust journal and the client ledger totals. Start free, no credit card.
Last updated July 2026
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A three-way trust account reconciliation proves that three balances agree at the same date: the adjusted bank balance on the trust account statement, the trust account journal or book balance, and the total of every individual client ledger balance. If all three match, no client money is missing or commingled. If they do not, the difference points to an outstanding check, a deposit in transit, a posting error, or funds applied to the wrong client. Most state bar rules require the reconciliation monthly, in writing, retained for several years, and the same discipline applies to real estate broker escrow and property management trust accounts.
The reconciliation itself is arithmetic. What eats the day is getting the bank side of the equation into a usable form and hunting the one transaction that breaks the tie-out.
Your practice management system holds the journal and the client ledgers as data. The trust account statement arrives as a PDF, so the comparison happens by eye or by retyping dozens of lines every month.
A reconciliation that is off by $312.50 is a search problem. Sorting and filtering the bank transactions next to the ledger detail finds it in minutes; scrolling a PDF does not.
Firms with a pooled IOLTA account plus separate interest-bearing client accounts, or brokerages with several escrow accounts, repeat the same manual step for each one every single month.
When reconciliations slip, the backlog is not one statement, it is six or twelve, across accounts, all of which have to be reconstructed in order.
A bar audit or broker examination asks for the reconciliation report, the supporting bank statement, and the client ledger detail for the same period. Screenshots and hand-tallied notes are a weak record.
Bank portals typically hand back a limited window of downloadable activity, while archived statements stay as PDFs. Reconstructing an old period means reading those PDFs.
BankXLSX does one job well: it converts the trust account statement into structured, sortable data so the three-way comparison becomes a spreadsheet exercise instead of a transcription exercise.
Dates parse as dates and amounts as signed numbers, so a lookup against the client ledger export or a sort by amount works the moment the file opens.
Each row keeps the printed running balance, so the converted sheet foots to the statement. That is the control that proves your bank column came through complete.
Archived and mailed statements are often image-only PDFs. OCR tuned for statement layouts reads them, which matters when you are reconstructing a period from months ago.
Upload a whole backlog at once: several accounts, several months, several banks. The output columns stay consistent, so the sheets stack cleanly.
Check numbers, wire references, and payee descriptions come through as their own data, which is what lets you match a disbursement back to the client it belongs to.
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Drag in the IOLTA or escrow statement PDF for the period you are reconciling. Add several months or several accounts at once if you are catching up.
Tip: Keep one file per account per month so each reconciliation stands alone.
Confirm the running balance on the last converted row equals the closing balance printed on the statement. That single check proves nothing was dropped.
Tip: Opening balance plus deposits minus disbursements should equal the closing balance.
Take the XLSX or CSV into your reconciliation workbook, add outstanding checks and deposits in transit, then compare to the journal balance and the sum of client ledgers.
Tip: A lookup on check number finds unmatched items fastest.
Anyone holding other people's money in a fiduciary account answers to a regulator who wants the three balances proven every month.
Reconcile a pooled IOLTA account and any separate client trust accounts against the trust journal and the individual client ledgers.
Prove that escrow and security deposit balances tie to each owner, tenant, and transaction ledger before the state real estate commission asks.
Take on trust accounting clients and clear a reconciliation backlog without keying a year of statements by hand.
Reconcile settlement and escrow accounts where each file has its own balance that must roll up to the bank.
Three-way reconciliation gets its name from the three figures that have to agree on the same date. Skip any one of them and you have an ordinary bank reconciliation, which will not catch the failure that matters most in a trust account: one client's money quietly funding another client's disbursement.
| Balance | Where it comes from | What it proves |
|---|---|---|
| Adjusted bank balance | Trust account statement, plus deposits in transit, minus outstanding checks | What the bank actually holds once items in flight clear |
| Trust journal (book) balance | Your running record of every receipt and disbursement across the account | That your own books captured every transaction the bank did |
| Sum of client ledger balances | Adding up every individual client or matter ledger in the account | That the money is allocated to real clients and none is overdrawn |
The number nobody should ever see is a negative client ledger. It means that client's balance went below zero, which in practice means someone else's funds covered the shortfall, and that is the exact scenario trust accounting rules exist to prevent.
Work in this order, using the same cut-off date for all three figures.
Steps two through five are your practice management system's job or your workbook's job. Step one is the part that stalls, and it is the part BankXLSX handles: the running balance extraction gives you a bank column that foots to the statement, and the bank reconciliation workflow covers the matching mechanics once both sides are data.
The ABA Model Rules for Client Trust Account Records treat quarterly reconciliation as the floor and note that monthly is the better practice, because finding an error inside three months of activity is far harder than inside one. Most states go further than the floor. Florida, for example, requires attorneys to reconcile the trust account monthly and to perform an annual detailed listing, and other states set their own monthly cadence, documentation, and review requirements under their version of Model Rule 1.15. Record retention commonly runs five to seven years after the representation ends, again depending on the state. The practical answer for almost every firm is the same: reconcile every month, put it in writing, have a lawyer review and sign it, and keep it. Check your own state bar's trust accounting rule for the exact cadence and retention period, because these are state rules, not federal ones.
Almost every failed reconciliation comes down to a short list of causes. Bank fees or a returned item posted by the bank but never entered in the journal. A disbursement recorded against the wrong client ledger, which leaves the bank and journal agreeing while the ledger total is off. Earned fees transferred to the operating account in a lump sum without a matching entry per matter. A check written in a prior period that still has not cleared. A deposit made on the last day of the month that the bank credited on the first of the next. Interest posted on an IOLTA account and swept to the state foundation. When the bank side is sitting in Excel you can sort by amount, filter by check number, and find which of those it is in a few minutes rather than an afternoon.
A workable template is three blocks on one sheet. Block one is the converted bank activity, straight from the statement, with columns for date, description, check number, amount, and running balance. Block two is the adjustment schedule: outstanding checks listed individually, deposits in transit listed individually, each subtotaled. Block three is the comparison: adjusted bank balance, journal balance, and the sum of client ledgers, with a difference cell that should read zero. Add a client ledger tab with one row per matter so the total feeds block three directly, and a lookup that flags any negative client balance. Once the structure exists, each month is a fresh converted statement pasted into block one. The mechanics of pivoting and totaling converted statement data are covered in how to analyze bank statements in Excel, and if you want spending grouped for the operating account side, the transaction categorization tool gives you a first pass to refine.
BankXLSX prepares the bank side. It does not maintain client ledgers, it does not produce the reconciliation report your bar association wants to see, and it is not a substitute for trust accounting software or for advice from your state bar on what your rule requires. What it removes is the transcription: instead of reading a PDF and typing, you get an accurate, source-traceable spreadsheet of the trust account activity in a couple of minutes. Firms handling the wider matter file can route everything else through the law firm converter workflow, brokerages and property managers will find the account structure discussed on the real estate converter page, and the general bank statement converter reads statements from more than 90 US banks, so a firm banking at two or three institutions still gets one consistent output format.
It is a monthly proof that three balances agree on the same date: the adjusted bank balance from the trust account statement, the trust journal or book balance, and the total of all individual client ledger balances. When the three match, client funds are intact and properly allocated. Any difference points to a specific unposted or misposted transaction.
The ABA Model Rules for Client Trust Account Records set quarterly as the minimum and recommend monthly. Most states require monthly reconciliation in writing under their version of Rule 1.15, with retention commonly five to seven years. Check your own state bar rule, since the cadence, review, and retention requirements are set state by state.
A two-way reconciliation compares the bank statement to your book balance, which is standard for an operating account. A three-way adds the sum of individual client ledgers. That third leg is what proves no client balance went negative and no client's money was used for another client's disbursement.
Yes, and many small firms do. You need the bank activity as rows, a schedule of outstanding checks and deposits in transit, a client ledger tab totaling every matter balance, and a comparison block whose difference cell reads zero. Converting the statement PDF to Excel is what makes the first block practical each month.
The usual causes are bank fees or returned items never entered in the journal, a disbursement posted to the wrong client ledger, an earned fee transfer made in a lump sum, or a check or deposit still in flight at the cut-off date. Sorting the converted bank rows by amount usually identifies the item in minutes.
No. It converts your trust account statement PDF into accurate Excel or CSV so the bank side of the reconciliation is data rather than a document. Maintaining client ledgers and producing the reconciliation report stays with your practice management or trust accounting system.
Yes. Broker escrow accounts, security deposit accounts, and property management trust accounts follow the same structure: one bank account holding money that belongs to many parties, each with a ledger that must roll up to the bank balance. The conversion step is identical.
Yes. Upload the whole backlog and each statement converts to its own sheet with the same column layout, which is what makes catching up on months of missed reconciliations realistic. Scanned or mailed statements are read with OCR.
The association version of the monthly tie-out.
The wider matter and firm statement workflow.
Match bank activity to your books.
The balance column that foots every page.
Escrow, deposits, and property accounts.
Clear a reconciliation backlog in one pass.
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