For one reason or another you have or are considering switching banks for the management of trust accounting. Perhaps your current bank isn’t living up to expectations so you are looking to start fresh with a new provider.
Our simple checklist highlights 8 steps to make the transition to a new bank provider for your trust accounting as seamless as possible. But before you switch banks, check that your bank is registered as an authorised deposit-taking institution with your relevant state Department of Fair Trading as seen here on the NSW Department of Fair Trading.
8 STEPS TO A SMOOTH TRANSITION
1. OPEN A NEW ACCOUNT WITH SERVICE NSW – (NSW ONLY)
The new SERVICE NSW site makes the process of registering a new account quite simple. We have step-by-step instructions on how to create a new trust account on our blog. Once you have the new account set up, you can work towards moving your clients over to the new provider.
2. ALLOCATE PAYMENT REFERENCE NUMBERS
Now you have two accounts, you can track all future deposits and which account they are being deposited into. Allocate payment reference numbers within your existing software while keeping the old trust account details on your invoices.
3. GIVE NOTICE TO YOUR TENANTS
You need to give your tenants sufficient notice about the change of bank providers. It will give them time to adjust payment on their side. Do this in writing by mail or email, notifying them of the change and allow them two months (extend this to three months if you have a large portfolio) to change their payment.
Ensure to include in your letter:
- Date of notification
- New bank details including payment reference number
- Deadline date of final payment into old account
4. THE TRANSITION PERIOD – RECONCILING TWO ACCOUNTS
This is where things can turn a little haywire if you are not on top of both accounts since this you will need to reconcile two trust accounts. Hence why it is advantageous to have your tenants convert to the new trust account as soon as possible. Once again, especially stressing the importance of providing a clear deadline to your tenants and for your own sake and sanity!
5. ONE MONTH FROM DEADLINE – SEND FINAL REMINDERS
There will always be those who leave it til the last minute. So send a final reminder notice one month out from your deadline to those who are still paying into the old account. Finally, highlight that once the old account is closed therefore monies will not be received and accounts will fall into debit.
6. TWO WEEKS FROM DEADLINE – PHONE THE STRAGGLERS
Check both accounts and highlight the tenants still making payments into the old account. For these clients, a personal phone call is the next step. So call each of them personally to remind them to make the change and follow up with a reminder email to get the point home.
7. D-DAY – ACCOUNT IS CLOSED
D-day arrives and the account is now officially closed. Hence no more chances. Therefore, update your trust accounting software for your receipting and reconciling with the new trust account details.
8. OFFICIALLY CLOSE THE OLD ACCOUNT DOWN
Contact your old bank and officially close the old account down. Finally, head back to SERVICE NSW (NSW ONLY) and follow the links to close your current account.
In conclusion, we hope the transition to a new banking provider for your trust accounting is seamless one and you are on your new path to trust accounting bliss.
~ 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 18 years industry experience. Don’t trust just anyone with your trust accounting. Trust End of Month Angels so you can get back to what you do best – growing your business.