Sarah should deposit the entire amount into the client account initially. According to the SRA Accounts Rules, all mixed receipts that include client money and costs for the firm must be deposited into the client account first. Sarah can then transfer the £2,000 for legal fees to the business account after issuing a bill to the client. Key Point: The SRA Accounts Rules require that any funds received that contain client money must be deposited into the client account first. This ensures the protection of client money and compliance with professional standards. After proper allocation, funds intended for the firm's fees can be transferred to the business account.