A title company (my client) maintains an escrow account for real estate closing funds. It is basically a clearing account. Title company is paid their fees and sellers get their proceeds. The account is being reconciled monthly in an escrow software. However, the balance in the account and associated liability are not reflected on the company financials. Because the accounts are in the FEIN of the title company, I believe the balances should be on the balance sheet. Client disagrees. According to the client "the funds in that account doesn't belong to me".
I'm confident that the title company is correctly reporting income AND that the escrow balances be reflecting on the company financials. Am I missing something?