Those located in Asia-Pacific will use the term Trust Account, where customers located in Europe will use the term Client Account. For the purpose of this article, we will refer to it as a Trust Account. For more information on regional terminology, refer to this article or contact support.
Here are some tips for trust accounting, which will help you avoid getting in trouble!
Rule # 1 - Only receipt funds you know you have.
- Import bank statements and matching funds received to income invoices.
- Process Payments to receipt cash/cheques received. Use Bank Deposits to keep track of which funds are deposited together.
- Where there is no income invoice available to match to, there are 3 options:
- raise an income invoice - for example, generate the next rent invoice
- reconcile funds to the tenancy ledger
- reconcile funds into the suspense ledger
- Check if any amount shows as an 'un-presented deposits' on the Client Accounting home screen - this is receipts for funds which have not yet been banked but are part of your ledger balances.
- Fees based on rent receipted or money into an account will be raised automatically.
Rule # 2 - Process all funds you want to pay out in the software first, then at the bank.
- Expense invoices need to be entered to be able to disburse, efficient managers enter these as they are received.
- Fees, Income Credit notes and Expense Invoices need to be disbursed before they will be available to match to bank statement transactions.
- the option to process tenancy ledger refunds is in the tenancy ledger.
- Use the bank payment file generated during the disbursement to make the payments with your bank - this ensures accuracy.
Rule # 3 - Don't let your suspense ledger get out of hand.
- regularly review the tasks for funds held in the suspense ledger, where possible resolve these.
- the suspense ledger balance can be positive or negative, if it falls too far negative you risk overdrawing your account when disbursing other ledgers.
- Utilise the notes section on suspense ledger tasks to help other users understand why an item is unresolved.
- the best way to resolve bank fees taken out of your client or trust account is to deposit the same amount back into it from your trading account.
Rule #4 - Keep each month separate.
always close the period as soon after it ends as possible.
never import or process payments for funds received in a new period until the close of period has been done.
- the financial summary report divides transactions into the columns for each month based on the monthly close.
- the date the period is closed is recorded, it looks better if you have done it on time.
- download new transactions from the bank, import and reconcile against income invoices and previously disbursed amounts;
- check the dashboard and action reminders, rent arrears and inspection notices;
- complete maintenance tasks, and add more detail to follow the workflow through to entering expense invoices;
- enter expense invoices for any other bills received, the bulk invoice attachment uploader is useful if you want to delegate the task of scanning and uploading;
- process disbursements for any amounts you need to pay out, upload the bank payment file created to ensure accuracy at the bank.