Getting to the Bottom of Batch File Payments
An aba file is an Australian Bankers Association electronic payment file format. These batch files are generated from your Real Estate trust accounting software when disbursing funds from your rental trust and can be read by your bank. Batch files are typically used in Property Management for paying Landlords and Suppliers and offer great time saving and accuracy than manually entering BSB and account numbers one by one.
A batch file contains multiple lines of text of account names, BSB and account numbers. The funds are distributed to multiple accounts with a few clicks of your mouse.
We have had several clients come to us lately with incorrect batch file payments. So this month we are discussing a guide around the batch file payment process to assist agents. Before we start, check out a previous article where we cover Bulk Bpay payments – another form of batch payments.
Common Errors in Batch File Payments
We generally see the same errors crop up on a regular basis. Here are the main culprits.
- Not renaming the file and therefore importing the same file twice.
- Keeping old aba files and importing the wrong one.
- Cancelling batch files within your software and still importing them through the bank. This causes discrepancies in your bank reconciliation.
The Batch File Payments Process
Below we outline the general process to follow when undertaking batch file payments.
- Generate batch file from your software.
- Save your EFT batch file payment list.
- Rename file accordingly: ie: 20180101_Landlords or 20180101_Creditors. You are less likely to pick the wrong file by renaming it.
- Confirm the batch file payment on the screen before accepting. If the batch file is $250,000 then your on screen balance should reflect the same amount.
- Save the payment file confirmation to match your EFT batch file payment list. This demonstrates they match for audit purposes.
- DELETE THE ABA FILE! Why? Once you have uploaded the file, it’s now deemed useless. You cannot use this file again so there is no point to keeping it.
- Many people believe that ABA files need to be kept. However, if you have kept a copy of your EFT list and your bank confirmation then you have everything you need to satisfy the auditor.
- If you have to reverse a batch in the software because you’ve made a mistake – DELETE the incorrect file. Ensure you upload the new file, even if the amounts are the same.
- Check, check and re-check before confirming batch file amount. Check you paying it from the correct account. Do the amounts match? Is the date correct? Taking 5 minutes to check these details can save you a world of pain!
Why is Nailing your Batch File Payments So Important?
There are 3 main reasons why this process is so important.
You can run the risk of:
- Overdrawing your trust and breaching legislation.
- Paying creditors or owners twice and having to ask for the funds back.
- Putting your reconciliation out of balance and causing unnecessary grief.
What’s Changing in NSW Around Authorising Batch Files?
As we discussed earlier this year, license changes are forecast for late 2018 or early 2019. As a result of these changes, only agents with a Licensee in Charge category of license will be able to approve .aba files and write cheques from the trust. This means that agents with Certificate of Registration and License will not be able to do the final batch file approval. We cannot stress enough how you need to be prepared for these changes as they will cause issues for a large number of offices if you are unprepared.
Start Training Now
The best way to ensure you are prepared for the changes ahead is to start the required training now to hold the appropriate license. Simply contact ACOP and they will guide you on what training you need to undertake to ensure you are qualified when the changes kick in.
– 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 20 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.