Client money

If your firm holds money that belongs to clients — a solicitor's or accountant's client account under the SRA or ICAEW rules — that money is not yours, and it must not be treated as your income, your expense or your bank balance. ac-co.ai keeps it on a separate track from the moment the account is designated.

Office money and client money

Every bank account in ac-co.ai is one of two things:

• Office money — your own business account. Transactions flow into the transaction inbox, get categorized, and become your income, expenses, assets and liabilities.
• Client money — a designated client account. Its transactions are deliberately excluded from the normal categorization engine, because categorizing them would book somebody else's money as yours. They are handled under Client money instead.

Client-money accounts are flagged as such in Bank accounts, so you can always tell at a glance which is which.

Designate an account

1. Open Client money → Designated accounts.
2. Choose Designate account and pick the bank account holding client funds.

Deactivating a designated account later stops new designations from using it; its history stays intact.

Allocating what comes in

Money that arrives in the client account before you know whose it is sits on a suspense ledger rather than being guessed at. Client money → Unallocated receipts lists everything awaiting attribution; allocating a receipt reverses the suspense booking and rebooks it against the client you chose, keeping both entries on the audit trail.

Client ledgers, statements and reconciliation

• Client ledgers show, per client, exactly what you hold for them.
• Reports produces a client ledger statement for one client, and a reconciliation statement for the account.
• Three-way reconciliation compares the bank statement, your cashbook and the sum of the client ledgers as at a period end. All three must agree (SRA Rule 8.3 and the ICAEW equivalents). Prepare the reconciliation for a period end, review the differences, then sign off; preparing again for the same period supersedes the previous run rather than overwriting it.

Overdrawn client ledgers

A client ledger can never go negative — that would mean you had used one client's money for another's. If it happens, it is a rules breach, and ac-co.ai says so plainly: a warning appears on the Client money hub and the affected ledgers are listed under Ledger breaches for you to investigate and correct straight away.