3 WAY RECONCILIATION – THE RIGHT WAY!
|Title companies are required by their underwriter to do a 3-Way Reconciliation for their attorney trust/escrow accounts. Most Accountants do not understand 3-way reconciliations. In fact, escrow and trust accounting is counter intuitive to many. A 3-way reconciliation for your Trust or Escrow account is the only accurate way to reconcile your bank account. We have worked with many title agencies over the years and we can help you too.
GENERAL QUESTIONS REGARDING 3-WAY RECONCILIATIONS:
We understand you may have a lot of questions and would like more information before contacting us, so below are some commonly asked questions that we receive on a frequent basis. Should you have any questions in addition to the ones listed below, please feel free to contact us.
What is a 3-way reconciliation? A 3-Way Reconciliation means that your Trust Bank Balance = the Trust (Escrow) Liability Balance = Client Ledger Balance. In other words, a 3-way reconciliation brings the book balance, adjusted bank balance and Trial Balance into agreement and accounts for each cent. This answers the question of whose money is in your escrow account.
If we use QuickBooks, can a 3-way reconciliation be produced? Yes, however, QuickBooks must be setup correctly or the account will never be able to tie out and your reports will be incorrect.
I have never produced a 3-way reconciliation before, will I be able to now? It depends. Since it is difficult to try to encompass all the different types of situations on this page, please contact us directly for our professional synopsis.
I am several months behind, can you catch me up and maintain my account? In most cases, yes. Before we begin, we would need to review the reconciliations you have been creating so far.
Our account is an interest bearing account (sweep, IOTA, IOLTA, etc.), can you reconcile it to meet our underwriter’s requirements? Yes, we know how to properly reconcile and account for interest bearing accounts.
My Underwriter requires our reconciliations on a monthly basis, can you send them to the Underwriter directly? Yes, as an additional service we can email your Underwriter your monthly reconciliations.
I am applying to a new underwriter and they are requiring the last 3 months of our reconciliations. We are behind, how fast can you catch us up? Unfortunately, it depends. Since it is difficult to try to encompass all the different types of situations on this page, please contact us directly for a possible date range.