Each company within your Re-Leased account has the option of being connected to Trust/Client Accounting OR Xero OR used as stand alone with no accounting connections.
Trust (AKA Client) accounting differs from normal accounting, as provided by the Xero connection, because it allows for the relationship between Property Manager and Property Owner and confirms to the strict rules of trust accounting.
The Trust Accounting feature offers the following functions:
- Compliance with Trust Account reporting requirements;
- Ability to safely hold funds on behalf of multiple individuals, it is not possible to overdraw a trust account ledger, and all funds are held separately for each customer within one bank account;
- Automation of fees, fees are automatically calculated based on transactions and events which take place in the database, and can also be raised manually;
- Landlord Statements, detailing the transactions recorded on their ledgers;
Future enhancements for the Trust Accounting connection will include an Owners Portal, and live bank feeds.
Steps for setting up a new Trust Account
The correct order to set up a trust account is as follows:
- Set up the company (Settings Menu, Manage Companies)
- Add a Company Contact, the payment details loaded is where your fee's will be paid to on disbursement, usually this is the trading account
- Set up or import Tax Types and Charts of Accounts
- Include a 'bank' type Chart of Account code for the trust account, add the trust account details
- Set up fee types, this can also be set up later - IMPORTANT: fees must be set up prior to transacting
- Set up at least one Disbursement Profile
- Add the Trust Account
- Add Cheque Book
- Add Properties
- Add Owner Ledgers
- Add Tenancies
- Cross check all data
- Conversion balances
- Add email templates for Owner Statement and Remittance Advice
1. Create a company contact
Add a contact for your Property Management agency. The contact type needs to be set to Company and all contact information completed including payment method. The payment details specified is where fees will be disbursed to.
2. Tax Types and Chart of Accounts
Set up all required tax types. See Tax Types for more information.
Set up all required Chart of Account codes, see the sample list in the image. This should include:
- Codes for all types of income that will be received into this account;
- Codes for all types of expenses that will be paid on behalf of property owners, this list should cover all expenses for Operating Expense budgets, as well as code/s for Property Management fees which will be raised;
- Liability code for Bonds;
- Equity codes for Owner Drawings and Owner Funds Introduced;
- A Suspense account; and
- A Bank Asset code for the Trust Bank Account.
Chart of Accounts - Trust Account
3. Set up Fees
4. Add Disbursement Profiles
If unsure, set up a Disbursement Profile called Ad-hoc All and tick all the options.
5. Add Trust Account
Click Settings on the green main menu, select the appropriate company, then Trust Accounts to add a trust account for that company
Click New Trust Account. Note that each company should only have one trust account. If more trust accounts are required, first set up a company for each account.
This option can also be accessed from the Trust Accounts page, by clicking Trust Accounts on the green main menu.
Select Bank Account
Select the Company to open further options on this page.
There should be only one option available when selecting the account - this links back to the Chart of Accounts and pulls through the name and account details loaded when setting up the COA.
Add a six-digit APCA (Australian Payments Clearing Association) number. This is a requirement for Australian bank account transfer files, contact your bank if you do not have your APCA number.
Select Property Management Agent
Select the Company contact.
Australian companies enter an ABN, New Zealand companies enter their GST number.
Enter the name of the Officer in Effective Control, this is the Principal or Licensee.
Select the Chart of Account for Bond refunds.
Select preferred format for Export file:
Australian Companies choose from ABA / EFT Direct Entry and ABA / EFT Direct Entry (self-balancing), contact your bank if unsure which is required.
New Zealand Companies choose MT9 for Standard Bulk Payments.
Set preferences for withholding funds for amounts owed.
Set preference for forcing rent to be receipted to the oldest unpaid period first.
Set preferred clearance times in days for different types of receipt transactions.
Select an opening balance date and balance, this must be in the past at the time of selecting and is overwritten by the conversion process. It is ok to leave this balance as $0 even if funds were held that date.
Close of Period options
Tick if the close of period should occur on the last day of the month, and which month the first close of period is planned for. If the Close of Period does not need to occur on the last day of each month a specific date can be selected. This can be changed if needed later.
Select frequency for the close of period, every 1 month is the most common option.
Select all users to be notified, the message will show on their dashboard each time a close of period is due, until it has been completed.
Select the audit reports required for the Close of Period. If unsure, select all the options and discuss any to omit with your auditor
Click Save to finalise entering your new trust account.
Viewing the Trust Account
The new Trust Account can be viewed by selecting Trust Accounts from the green main menu.
Click the ledger type links to see the ledger lists and option to add Owner ledgers.
If the CONVERSION warning button is available, the opening balance for this account have not been set. Once conversion balances have been entered this option will no longer be available, and normal trust account options will become available in it's place.
If you have a lot of Trust Accounts, a search bar becomes available. There is also a company filter if the user logged in is associated with multiple companies.