Client account software for solicitors has one job before any other: keep money that belongs to someone else separate from money that belongs to the firm, and be able to prove it at any moment. Everything else, the reporting, the interest, the month end, follows from that.
This is a practical guide to what the client money rules ask of a firm, and what software has to do to satisfy them rather than merely claim to. It is market commentary and a compliance overview, not legal advice.
What counts as client money
Client money is money you hold for a client or a third party: money on account of costs not yet billed, money held for a completion, damages received, an estate balance, money for a disbursement you have not yet paid. It is not yours. The firm holds it, the client owns it.
Two consequences run through everything below. Client money lives in a client account, separate from the office account. And every penny in that account must be attributable to a named client and a named matter, because a balance nobody can identify is a balance nobody can return.
The four things the rules actually require
A ledger for every client. Records must be accurate and identified by client name, with client money on one side and everything else on the other. In practice that means a running balance per matter that you can open and read, not a spreadsheet reconciled once a quarter.
No overdrawn client ledger. You cannot spend one client's money on another client's matter. This is where a lot of firms get into difficulty by accident: a payment goes out against a matter that has not received the funds yet, and for a period the firm has used client A's money for client B.
Writford enforces this in the posting engine rather than in the interface. The balance decrement is atomic and refuses unless that matter already holds the money, so an overdraw throws rather than saves. The client money reports exist to prove the guard held: an empty overdrawn list is evidence, not a hope.
Money returned promptly when there is no longer a reason to hold it. The rule is not "eventually" or "at the end of the file". It is prompt, as soon as the reason has gone.
Writford treats this as an ordering constraint. A matter still holding client money cannot be sent to the bin, and the refusal names the action the rule prescribes: return the money to the client, or transfer it to the matter that now has a proper reason to hold it. Filing a matter away on top of somebody else's money is the one thing the software will not help you do.
A fair sum of interest on money held. The rule sets no rate, no threshold and no method, deliberately, because a fair sum on five hundred pounds held overnight is not a fair sum on eighty thousand held for a year.
So Writford ships with no interest policy configured, and an unconfigured policy reports itself as unconfigured rather than as zero. Those are different answers, and a firm that reads a blank screen as "we owe nothing" has been misled by its own software. Interest also follows time rather than the closing balance, because money held for one day of a year has earned one day of interest.
Designated accounts, and when you need one
Most client money sits in the general client account. Sometimes a matter needs its own separate designated account, typically where a larger sum is held for a long period and the client is entitled to the interest that specific deposit earns.
Software should treat a designated account as a first-class thing with its own ledger and its own reconciliation, not as a note in a field. Writford does, and the balances roll up into the same reports as everything else.
What to check before you buy
Ask for a demonstration rather than a feature list, and watch for four things.
Ask them to overdraw a client ledger in front of you. If the system allows it and reports it afterwards, that is detection. If it refuses the posting, that is prevention. They are not the same control.
Ask what happens when two people open the same reconciliation. Ask what the system does when a matter holding client money is closed. Ask whether an unconfigured interest policy shows as zero or as unconfigured.
Then ask who can do what. A cashier needs to see every matter to do the accounts and should not be able to edit any of them, which is why read access and write access have to be separate permissions rather than one "firm access" switch. Our guide to legal cashiering software walks the same questions across the other packages on the market.
Where this sits in the day
The reason client money and matters belong on the same records is that the errors are almost never accounting errors. They are timing errors. Time recorded late, a bill raised days after the work, a disbursement on a spreadsheet nobody reconciles. By the time that reaches the cashier it is already wrong, and the reconciliation becomes an exercise in explaining a difference rather than preventing one.
Keeping the ledger and the matter in one place does not make a firm compliant. It removes the gap where the mistakes happen.