Best Practices for Handling Money in Client/Trust Accounting

  • Updated

For our Asia-Pacific customers, the term "Trust Account" is used, while European customers refer to it as "Client Account". It's important to mention that the Client/Trust Accounting functionality does not apply to customers in North America. For further information on regional terms, check out our Glossary of Regional Terminology.

This article outlines key best practices for handling funds in your Client/Trust Account. Proper management of your accounts is essential to avoid errors and maintain compliance. This article will guide you through the four (4) critical rules to adhere to, along with suggested daily tasks to keep your financials in pristine order.


Verify Funds Before Receipting

Ensure you receipt only the funds you have confirmed as received:

  • Import bank statements and match received funds to income invoices.
  • Use Process Payments for cash/cheque receipts and track deposits with Bank Deposits.
  • Where an income invoice isn't available:
    1. Raise an income invoice (e.g., upcoming rent).
    2. Reconcile funds to the tenancy ledger.
    3. Reconcile funds into the suspense ledger (not compliant in all locations, check with your auditor).
    4. Reconcile funds to an adjustment (compliant alternative to suspense ledger for locations with this requirement, contact support if you need this option enabled).
  • Monitor any Unpresented Deposits on the Client/Trust Accounting home screen as these are part of your ledger balances but not yet banked.
  • Automatic fee generation will occur based on rent receipted or funds entering an account.


Processing Funds in Re-Leased and at the Bank

Always process disbursements in Re-Leased before processing from the bank:

  • Enter expense invoices promptly as they're received to prepare for disbursements.
  • Disburse fees, income credit notes, and expense invoices to make them available for bank statement matching.
  • Refunds from the tenancy ledger can be processed within the same ledger feature.
  • Use the bank payment file from disbursements to ensure bank payment accuracy.


Manage Your Suspense Ledger

Maintain regular checks on the suspense ledger to prevent discrepancies:

  • Check with your auditor to confirm using the suspense ledger is compliant for your location.
  • Regularly review and resolve funds in the suspense ledger.
  • Ensure the suspense ledger doesn't fall negatively enough to risk overdrawing when disbursing other ledgers.
  • Make good use of the notes section on suspense ledger tasks for clarity among users.
  • Handle bank fees by reimbursing your client or trust account from your operating account.


Keep Monthly Financials Distinct

Segment your accounting records monthly for transparency and ease of auditing:

  • Close each accounting period shortly after its conclusion, check with your auditor to confirm the correct timing and order of processing.
  • Avoid importing or processing new period payments until the previous period's closure is complete.
  • Financial summary reports will segment transactions by month, contingent upon the monthly closure.
  • Maintain a timely close of period schedule for a favourable audit appearance.


Suggested Daily Tasks

To streamline your client/trust accounting operations, consider these daily tasks:

  1. Import new bank transactions, reconcile them, and attend to previously disbursed amounts.
  2. Check your dashboard for reminders, rent arrears, and inspection notices, and act where needed.
  3. Complete and detail maintenance tasks, including processing expense invoices via workflow.
  4. Input expense invoices as soon as they're received; the bulk attachment uploader is handy for mass uploads.
  5. Process disbursements and ensure accurate banking with the generated bank payment file.

By sticking to these guidelines and establishing a routine with the suggested daily tasks, you can manage your Client or Trust Account effectively, uphold accuracy in your financial reports, and remain compliant.

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