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 trust account 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.
Suggested daily tasks to complete:
- 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.