There is nothing worse than having a pearler of a stress-free month without any unforeseen hiccups to then finding yourself smack bang in the middle of End of Month with no prior preparation or planning. You wouldn’t expect a pro boxer to jump in the ring without any prior training and sparring right? Be prepared or prepare to fail. Harsh, yet true!
We’ve been through a LOT of end of Months (more than we could even count by now), and one thing is for certain – taking care of the little things goes a long way. Prepare by factoring in all the minor details that often go under the radar.
Being organised and prepared will put you in good stead to come out unscathed at the other end. To help, we’ve prepared an End of Month checklist and an EOM Essentials shopping list so you can be assured you are heading into the ring with the best amount of preparation possible.
The rest is up to you.
THE ESSENTIAL END OF MONTH SHOPPING LIST
Sure these sound simple right? You’d usually have them in abundance right? Murphy’s Law states your stationary cupboard will be bone dry in come EOM time – so grab the list and head to the shops.
- Paper
- Folders
- Ink/Toner
- Staples
- Stamps
- Envelopes
- Chocolate/Coffee/Tea/All of the above (this should really be point #1)
- Panadol (we should really move this to #2)
DAILY CHECKLIST
Photocopy/Scan your invoices
If your software does not electronically scan and file invoices, keep on top of your photocopying on a daily basis to avoid it building up to unfathomable proportions.
Keep the copies in an expander file in alphabetical order to attach to your Landlords statements.
Backup
Section 22 (10) of the PSBA Regulations 2014 states backups must be done at least once per month. Backing up once a month is the absolute bare minimum. We recommend backing up daily as you never know what can happen. In the event of a fire or your server crashes, having your data backed up ensures all your important information is safe and accessible meaning your landlords get paid. Check out our previous blog on Backing Up your Data.
Reconciliation
Once again, regulations state we must reconcile within 21 days after the End of Month – however, once again, this should be bare minimum. Most trust accounting software make daily reconciling so easy it should become a daily habit. Leaving it til the last minute will only induce more stress and problems with balancing accounts and paying landlords.
Receipting
One of the daily regulations we definitely agree with is Section 26 of the PSBA Regulations 2014 stating we must receipt daily. Receipting daily makes a breeze of arrears management and allows you to give a confident response to all account balance enquiries from your landlords at the drop of a hat.
THE COUNTDOWN…
THE FORTNIGHT BEFORE:
Cheque Count: Make sure you have enough cheques and order more from your bank if needed.
ONE WEEK BEFORE:
Prepare your Landlord newsletter (if you have one) or plan what you’re going to write as a statement message across all of your owner statements. Most trust software will allow you to write a global statement message to all of your clients. Including a standard reminder about the importance of having Landlords Protection Insurance is a good inclusion on your global statement from a risk management perspective.
THREE DAYS PRIOR:
Collate the bond forms and reconcile the bond account. Check all the relevant forms are signed and ready for when you make the disbursement. If any forms are missing or in the wrong file, this will give you time to chase them up.
Check your unidentified deposit account and see if any of the money has been identified. The more money you can allocate correctly and not move over to a new month – the better. Receipt money to the correct tenants where possible and don’t allow the account to build up. This money belongs to your clients and where possible should not be carried over into a new month.
Check and clear your holdover account or suspense ledger and clear it as much as possible. Disburse the funds to the correct account and do not allow the funds to accumulate. Clearing this account regularly by investigating where the funds need to go and making the appropriate journals to correctly allocate the money to the right people.
THE DAY PRIOR:
Do a stocktake to check supplies and if in doubt, grab our handy shopping list and stock up.
Perform a statement run preview to make sure that there are no anomalies (funds withheld, double paid invoices, overcharged commissions/fees) or missing client account details. Contact clients for any missing details and enter them immediately into your software to minimise your cheque run.
Review any unpaid invoices which will identify what can be processed. If possible, disburse your creditors the day before to take the ease off End of Month.
The Big Day:
First and foremost – back up again! We cannot stress this enough times. 40% of our calls are from clients who didn’t back up and their server died in the middle of the statement run – losing all data. This is not a good situation to find yourself in, so back up first!
Read above point again just to be sure. Ok, now you’ve backed up – on to the next point.
Receipt any last minute rents that have appeared on the bank statement. Note – don’t release any funds to an owner where the tenant has provided you with a cheque on the morning of End of Month. If the unfortunate event of a bounced cheque occurs, you’ll be forced to ask the owner for the money back – never a fun phone call to make. Trust us on that one.
Reconcile one last time to make sure your software balance and your physical bank statement balance match up. This is what your auditor will be looking to see if audited
Perform your statement run in your trust accounting software.
Back up Again!! Backing up before and after EOM is always advisable The information in your software has changed and you could be forced to run the process again if data is accidentally erased.
Upload your payment files through your banking product keeping copies of the payment list. To avoid overdrawing your trust account, delete the file after you have completed the upload to make sure you don’t send it again.
Collate your statements and send to your clients with the appropriate attachments.
Breathe a sigh of relief…until the next month.
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~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 19 years industry experience. Don’t trust just anyone with your trust accounting, trust End of Month Angels and get back to what you do best – growing your business.