What is the difference between a Three-Way Reconciliation and a Detailed Reconciliation?

A Three-Way Trust Reconciliation Report and a Detailed Trust Reconciliation Report both serve to verify the accuracy of trust account records, but they focus on different aspects of the reconciliation process.

The Three-Way Reconciliation compares three key balances: the trust bank account balance, the trust ledger balance, and the total of all client ledgers. This ensures that the money held in trust matches what is recorded in both the books and individual client accounts, which is especially important for legal compliance purposes.

The Detailed Trust Reconciliation Report breaks down all individual transactions for a specific period, such as deposits, disbursements, and the resulting balances. It offers a line-by-line view of activity within the trust account, which is helpful for reviewing the accuracy of entries and tracking specific transactions.

While the Three-Way Reconciliation focuses on balance alignment across three sources, the Detailed Report focuses on transaction-level detail. Many firms use both reports together: the Three-Way Report for overall balance verification and compliance, and the Detailed Report for internal audits and transaction tracking.

Both reports can be accessed by viewing the Reconciliation History.

1. Ensure you have completed the bank reconciliation for the desired month.
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2. Select the Accounting tab on the navigation bar and select Banks & Credit Cards.

3. From the Bank Accounts & Credit Cards page, select the appropriate Trust account to view the reconciliation reports.

3. From the Account Ledger page, click View Reconciliation History.

4. Identify the appropriate monthly reconciliation that you require and then click the folder icon under either the Detailed Reconciliation or the Three-Way Reconciliation to download a PDF of the report.

5. A download window will appear showing the report as a PDF. Click Open File to view it.

Note: if the report does not open, ensure that pop-up blockers are disabled in your browser settings.

6. Print the Report as needed. Once the PDF is open, use your browser or PDF viewer's print function to print the report.

When reviewing these reports, it's important to ensure that your Bank Records, Trust Records, and Ledger Balances display the same amounts. This shows a successful reconciliation and balance of accounts.