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3 Red Flags Post NSW Licensing Reforms

If you are a regular reader of our blogs (like we know you all are!) you would have heard us banging on on over the last year (and the year before that) about the upcoming NSW licensing reforms for the Real Estate Industry. In case you missed it, here is a brief update:

We told you we had prepped you right?!

Yes, we are still waiting.

Just like you, we are eagerly awaiting the implementation of the changes. Fair Trading have announced that the changes are not far off. An exact date is yet to be confirmed but we have been advised that it will happen at the latter end of this year.

Why Is There Change Afoot?

We know that change can be scary. However, the main reason for the reforms will indeed help the industry. They will help to:

  • Provide a career pathway for industry practitioners
  • Establish clear duties and responsibilities
  • Increase the supervision
  • Protect the consumer from dealing with inexperienced operators.

Along with these benefits, there will also be things Property Mangers & Trust Accountants cannot do on their current Certificate of Registration.

3 Things Property Managers & Trust Accountants Won’t be Able to Do Post NSW Licensing Reforms

  1. Authorise Trust Transactions

    Property Managers or Trust Accountants will NOT be able to authorise any transactions from the trust account. All payments from the trust account will need to be made specifically by holders of a Licensee in Charge license. ‘Authorise’ means that Property Managers/Trust Accountants will be able to prepare trust transactions but not have authorising access to the bank, be a signatory of the trust account cheque book or hold an authorising device from the bank.

  2. Sign Agreements Without Licensee

    All Property Managers entering into an agreement with a new Landlord will be required to have the document ‘signed off’ by the Licensee in Charge or someone with a full License. Unfortunately, this is not ideal in reality when trying to acquire new business… ‘hang on Mr. Landlord, I’ll just get my superior to sign off on this.’ Once again, new processes will need to be put in place to deal with your workflow.

  3. Work in the Industry after 4 Years Without an Upgrade in Qualifications

    All current Certificate of Registration holders have 4 years from the reform date to obtain a license at a Diploma level (Currently Cert IV level). If individuals do not meet the requirements within the 4 year deadline, they will face a 12 month operating exclusion.

How to Prepare for the Changes Ahead

  1. Firstly, read our above blogs that cover various aspects of the changes ahead.
  2. Secondly, speak to our friends and partners at the Australian College of Professionals (RTO #91513). They can assist you with completing the necessary training requirements prior to the reforms. Also, depending on your existing skills and qualifications, you may be eligible for Recognition of Prior Learning (RPL) on some aspects of the licensing course.

End of Month Angels have worked with ACOP for some time now and have been busy preparing for the changes ahead. Our staff have been working towards obtaining their licenses and will all eventually hold a Licensee in Charge qualification. This means, post reform implementation, all members of our team can assist those clients who do not have their internal staff qualifications up-to-date.

Contact us to discuss how we can assist your team in preparation for the changes ahead.

– 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 21 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.

Am I Sitting On A Gold Mine?

Well, we all wish we were sitting on a gold mine. Whether it be a lost lotto ticket or a perhaps a buried wad of cash in our backyard. Chances are, we are likely to not ever come across either. However, you very well could be sitting on a very tidy gold mine in the shape of a rent roll sale.

Thinking of selling your rent roll?

Lately you may have had thoughts about a potential rent roll sale. There are many reasons why agents sell their rent roll. A potential rent roll sale could stem from any variety of issues including:

  1. A downturn in the sales market – looking to cash in when sales are slow.
  2. Staffing issues – where you just don’t have the staff to cover the role any longer.
  3. Retirement, illness or divorce – see Point #2.
  4. Business partners split – which requires a reshuffle of the business – also see Point #2.
  5. The need for a fresh start – sometimes don’t we all?

Do any of the above sound familiar?

If so, it could be time for you to take advantage of the downturn in the market. Take the opportunity to cash in your pot of gold.

Now enters the age old question….

What Is My Rent Roll Worth?

As with all financial transactions, there are many factors at play. Firstly, the multiplier will be largely determined on a number of factors. We discuss these in our earlier blog on Rent Roll Tips To Avoid Purchasing A Lemon.  However, there are some simple things you can do to increase the value of your portfolio.

  1. Sack D grade owners.

    They are wasting your time and chances are they will  drop off with the transition. It is always better to have the upper hand and reduce the number of difficult landlords.

  2. Crack down on your arrears.

    A clean slate is always better than a messy one. Issue terminations where possible and restructure your internal processes to have a sparkling, shining rent roll with minimal arrears.

  3. Review management fees

    Take the time to review your management fees and increase where necessary. You may have some owners that drop off with the increase and that is OK. They are more than likely not worth the hassle anyway.

  4. Ensure inspections are all up to date

    This will help you to determine which properties need work. It also allows the opportunity to identify any serious maintenance issues that can be resolved prior to the sale.

  5. Spring clean your data in your trust accounting software

    You all know how much we love organised, clean data. A good spring clean will ensure you have accurate, up-to-date data which will make it easier for your broker to determine your rent roll value.

If you are considering a rent roll sale and would like a confidential (and completely obligation free) discussion about the value of your rent roll, then get in contact with our new division – Rent Roll Angels. We are here to ensure your rent roll sale is a smooth and seamless one.

– 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 21 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.

Rent Roll Purchase Tips to Avoid Buying a Lemon

The Appeal of Rent Rolls

There’s no doubt rent rolls are hot property in Sydney at the moment. The Inner West and North Shore areas are leading the charge as favourites where we have heard reports of agents paying in excess of $4.50.

Rent rolls are a stable source of income if managed correctly. They are highly sought after by agents looking to expand their Property Management departments. We have also seen lots of silent investors looking for alternative options to invest their money in a well running rent roll.

Whilst we hear from our clients that many banks are tightening their reigns and making lending extremely difficult, we are seeing many smaller rent rolls come onto the market. Agents are consequently snapping them up with their existing available cash flow.

So why smaller rent rolls?

Some agents may be selling a portion of their portfolio where they have ‘out of area’ properties.  Other agents are simply looking to offload that part of their business and focus on other areas. Whatever the case, they are hitting the market and being snapped up accordingly.

In the market for a rent roll?

So if you’re in the market for a rent roll, common questions we come across are:

  • What are some of the factors that makes one rent roll more enticing than another?
  • How can you avoid purchasing the proverbial lemon?

Here are just some of determining factors you should consider when making an offer on a rent roll.

Questions to ask when considering a rent roll purchase

  • What is the number of properties in the portfolio? Is the agency selling a portion or are they selling the entire rent roll?
  • How many of the portfolio are currently vacant? (These ones will probably drop off to other agents).
  • What are their arrears like? Are there many 14 days and above? (You don’t want to spend any more time at tribunal than you have to).
  • How many properties are in fixed term leases? (To get an idea of future vacancies).
  • Do they have any leases expiring in December? (You don’t want to be leasing property at this time of year).
  • Are the inspections up-to-date?
  • Are there any Landlords selling their property in the next 3 months? (Weed out any issues before they happen).
  • How many of the portfolio owners own multiple properties? (This can be a bad thing because you don’t want to find out there’s a single owner that owns the entire portfolio).
  • Where are the properties located geographically? (You don’t want to drive to whoop whoop to do inspections).
  • What are the condition of the properties? A, B, C or D grade. (You don’t want to purchase a portfolio of all D grade properties which usually means Z grade tenants and owners).

How to make your rent roll transaction a smooth one

It is a bonus if the selling agent uses the same software as the buying agent. This will make the process a whole lot easier for you as the buyer and is one that is often overlooked!

What offer should you make?

The multiplier will variable depending on the location and ‘health’ of the portfolio. It generally floats between $3.00 – $3.50 per $1 of management fee income.

Our sources report that the multiplier for rent rolls in Western Sydney are between $2.80 – $3.30. Agents have reported that there are many rent rolls to choose from due to the declining sales market in certain locations. A lot of ‘sales only’ agencies who were performing well when the market was at its peak,  are looking to cash in. They are seeking to take a break from the market while is quiet, which in turn is pushing prices south. Look out for ‘bargain buys’ in these areas.

The Final Word…

Are you looking to purchase a rent roll and need help on ensuring you don’t buy a lemon?

We offer a unique business broking consultation service for rent roll buyers and sellers. The same great service under a fantastic new name. Do not hesitate to get in contact with our new division – Rent Roll Angels.

– 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 21 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.

The Year That Was – A Note from Jane

Woah is it the end of the year already?! 2018 went very quickly and what a year it was.

No doubt the highlight of this year was Jerome and I welcoming our son Marley into the world in April. He has been a constant source of joy for us and he’s settled into our life very quickly. Although Tracy officially sacked me and forced me to go on maternity leave for 4 months, I was working behind the scenes at night to help keep the team running. Marley came to the office with us from just 3 weeks old and became the mini Trust Accountant. I have to really thank Jerome for holding everything together during the early months where we were ‘one man down’. As they say it takes a village to raise a child, well this is definitely true. All of the girls in the office are the best aunties we could ever ask for.

This year we had the addition of several new team members. We welcomed Jo our Trust Angel in April, our Junior Bookkeeper Susan in May and my personal Assistant Angel Jessica in June taking us a solid team of 7. We’ve definitely come a long way since I launched EOM Angels in 2012. Back in the days when it was  just me and my car, driving around like a mad woman on end of month, floating in and out of as many agencies that I could cram into one day. Thank god we’ve evolved since then! Thanks to my strong team and amazing new technology.

A Year of Change

2018 we made the bold decision to discontinue supporting server based software. It was a tough decision for us to make as a business as we like to help everyone. Yet I don’t regret converting to cloud. We’ve supported and trained several agents throughout the year converting their data from server to cloud. We’ve directly handled more than 10 migrations for our own clients, manually converting data from one program to another – a huge job but one that has paid off. Supporting our clients is now a breeze. We don’t experience access issues, there’s no lag time, we don’t need screen sharing software and tasks that used to take 3 or more hours, now take under 30 minutes. And our clients could not be happier. Our clients, Landlords and Tenants are singing praises as the new technology is making their lives easier too. The transparency it provides them in the way of accessing their data and contacting their agent after hours.

I expect 2019 will be another huge growth year. We expect to see many more agents get fed up with the slow speed and outrageous costs of their server based software and take up the latest cloud programs.

This year was my 5th year training Trust Accounting for the Australian College of Professionals. Rosy and John do such an amazing job at providing a fabulous workplace for the staff and trainers. It is a pleasure to be a part of their extended family. I love going to the College every month seeing my students wanting to change their careers or improve their current work position.

Fair Trading Reforms

Although we didn’t see the NSW Reforms take place this year, Fair Trading have stated that changes are ahead. We expect to see this take place in the first half of 2019. Throughout 2018 we have been prepping our own staff for these changes by putting them through the NSW Real Estate licensing course in association with the College. You may have read in some of our earlier blogs this year that only people with a Licensee in Charge category of license will be the ONLY people authorised to move funds from a trust account. So we have armed ourselves with as many licensed agents as possible so we can offer premium service to our clients in 2019 that may not have staff at the required licensing level.

A Growing Client Base

As our staff grew this year so did our client base. We now support clients Australia-wide in all things Trust Accounting, Bookkeeping and Real Estate software related. We’ve had lots of positive feedback throughout this year about this newsletter and the articles that we provide. We spend lots of time sourcing the information (whilst keeping out the boring bits) to arm you with some powerful tips on compliance and legislation. If there are some topics that you would like to see covered in 2019 then email us. We’ll be sure to include some new and exciting ways to do business!

Thank you to all of our new and continued to clients for all of your business throughout 2018. We look forward to continuing to provide you with the same premium service in 2019.

Jane x

Choosing the Right Time to Switch to Cloud Accounting

Waiting til the Party Season is Over

The start of the New Year is renowned for assessing your current situation – whether it be electricity, insurance, private health, marriage (kidding) – and upgrading or switching to a better deal. New year, new a start and all that. For some services, the New year is a great time to make a switch. Yet for others, like switching your trust accounting software to the cloud, it pays to wait one month longer til the silly season (and party season) is over.

Waiting until the holiday season is over for any major accounting software migrations will have you as zen as our friend here. Let’s discuss how and why.

A lot of companies are making the move from old server-based systems to the cloud. The cloud offers a much more beneficial, time efficient, cost effective alternative to clunky server-based systems. Yet timing is most definitely everything and you want to ensure you get it right the first time.

As such, we highly recommend holding off your migration to the cloud after January. The first of any new month is the best time to make the switch. So we suggest to use January as the time to do your research. Do your reading and start your checklists to ensure you account for each step. Check out our previous migrations checklist to get you prepped and ready. Once everyone is back on deck, you can use February to book in the migration and inform and educate your staff of the changes where needed.

Come the 1st March, you are ready and rearing to make the switch over to the cloud.

The Bonus of Patience

The best thing about putting off the switch until after the Christmas and holiday season is that you have people around you should something go wrong (touch wood). If you decide to migrate on the 1t January and hit a roadblock, your chances of finding someone to assist have decreased dramatically. Come February and March, you’ll have people lining up at the door to help.

– 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.

Stay Stress-Free and Breach-Free This Holiday Season

The holiday season is so close we can feel it. We can smell the jasmine in the air, the Christmas decorations are up in the shops and Christmas party prep is well underway. So amongst all that, you may very well be planning your Christmas break from the office.

As licensee, there are two requirements to ensure before you pack your bags. That your holiday is both stress-free and breach-free. We are here to make that happen. Here’s what you are going to do.

HOW TO STAY STRESS-FREE ON YOUR HOLIDAY

These pointers will assist those who are heading O/S on their annual break from the office.

  1. Let everyone know you are closing down

    Notify all your clients of your pending office closure. We cover how to do this in a previous blog and even include nifty office messages you can use.  You’re welcome!

  2. Buy data when you arrive at your destination

    Prepaid Australian data is a rip-off. Buy a local prepaid SIM card when you arrive.

  3. Take your banking token with you

    Keep it secure in your hotel safe.

  4. Don’t use hotel wi-fi for banking

    Never use hotel wifi to access any of your banking. The risks are a lot higher using public wifi and you are at risk of your banking info being stolen.

HOW TO STAY BREACH-FREE ON YOUR HOLIDAY

We understand that by December we are all ready to disburse funds as needed, close off end of month and get outta there. Two of these three options are fine. Which is the odd one out?

  1. Ensure to close off December after allocated EOM deadline

    If you are closing the office mid-December, do not leave your December reconciliation until January EOM as you will incur a breach for not reconciling in the required timeframe. You are free to disburse funds prior to closing, however you will need to reconcile within 21 days of end of month (NSW0 10 days (VIC) and 7 days (QLD). Do not leave to reconcile on the 31st January! This is a common error and can be a costly one.

  2. Don’t close off December too early

    On the other side of the coin, be sure to not reconcile too early! if you close off too early, you will exclude any transactions that occur after the close off period. Enter a breach as this does not reflect true End of Month. Disburse early as needed, but perform end of month at end of month (the last day of the month or the first day of the next month).

So follow these steps to ensure you stay stress-free and breach-free this holiday season. Now cheers to that!

– 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.

A Licensee Holiday – Is There Really Such A Thing?

Licensee holidays. They can be as elusive as snow on the roof on a hot Aussie Christmas Day. Yet, they can be done!

Gone are the days where as Licensee you are all but forbidden to take some precious annual leave. No longer are you tied to the physical compound of your desk. With all the amazing advances that come with cloud technology, you can keep your finger on the pulse within your agency from anywhere in the world!

All you need to do is choose the location.

Even with the boundless connections technology allows us to have with our work, there are still some logistical considerations to be undertaken. While it would be great to think we could clock off at 5pm on our final day and whisk away to a hammock with a cocktail in hand, the reality is, as Licensee, you have responsibilities.

But with the right amount of planning, you can tick these babies off your list and get the swimmers and sunscreen ready.

Your Pre Licensee Holiday Action Plan

  1. Write to Fair Trading Or Your Relevant Governing Authority

Notify your equivalent of Fair Trading of your departure advising them of your absence from the business and the duration. Detail the delegated person/s you have left in charge of the agency and their contact details. Keep a copy of the letter for your staff in your absence.

  1. Delegate, Delegate, Delegate!

Nothing says Christmas holidays better than a good dose of delegation. Clearly outline each and every person’s tasks clearly and ensure everyone knows who is responsible for what. Make it clear – pin it up on your office wall if needed. Let there be no confusion as this is key to your holiday happiness. Do note, the people you delegate to must be qualified and experienced to hold the responsibility during your absence. Ensure responsibilities are in writing, signed and a copy given to both parties. Just a few jobs to think about:

  • Trust account management
  • Daily banking
  • Marketing
  • Complaints and compliance (hopefully minimal).
  1. Prepare for an Audit

No doubt, when away the cats will play – and along with come the auditor. But do not fear as you have prepared for this! By correctly implementing steps 1 and 2, you have safeguarded yourself against any breaches. Hoorah! As a double safeguard and piece of mind, read our list of 10 Steps for Surviving a Fair Trading Audit.

  1. Get Jiggy with Technology

By now you no doubt communicate with your staff on one or several online platforms as well as utilising one or more project management platforms. Both are great ways to keep in touch with office happenings without being in the thick of it.  Our favourites: Skype and Trello. Skype allows instant, urgent messages to be sent and Trello allows you to delegate tasks to staff and share amongst your team members. These two tools could be all you need to keep your finger in the pie, whilst probably eating pies of many varieties.  As long as you have access to reliable internet, you are right as rain. Better yet, most platforms are free!

  1. Have a Plan

Preparing for the worst is always a good idea. It will allow you to create a risk management plan should everything hit the fan. Develop the plan and sit with your staff to run through it. There are heaps of templates available if you haven’t ever developed a risk management plan before. They can help you identify all the possible risks while you are away and rate each risk on their likelihood of occurrence and impact to the business. You will then identify the appropriate action for each risk; Avoid, Reduce, Transfer, Finance or Retain and delegate the responsible person/s for action.

If any of your holiday contingency plans are in doubt, get in touch with us and see how outsourcing your agency management in your absence can lead to a happy and stress-free licensee holiday.

– 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.

The Difference Between Strata Trust Accounting & Real Estate Trust Accounting

The mere mention of the word ‘strata’ is enough to have some agents running for the hills. But with the increase of apartment living in Australia, agents may wish to start looking at strata as another area to expand their business.

So what is different between strata trust accounting vs normal real estate trust accounting?

When it boils down to it, not really that much. It’s still money in, money out. However, there are some differences that you need to be aware of, particularly in NSW.

We’ll explain some of the characteristics of each to help provide an understanding and make strata sound a little less scary.

Real Estate Trust Accounts

The top key unique identifiers of a real estate trust account include:

  1. The account name is in the name of the Corporation license. It will contain the words ‘trust account’. For example: My Real Estate Pty Ltd T/as Best Agency Trust Account
  2. Each trust account is registered and has a UID number from Fair Trading.
  3. A trust account does not earn interest for the agency or its clients. Interest earned on trust accounts is used for the relevant statutory Compensation Fund.
  4. The account is subject to mandatory annual audits. They are performed on each trust account, such as rental and/or sales trust.
  5. Reconciliations must occur within prescribed time frames. Check your State legislation for deadlines.
  6. Landlord receive monthly statements from the trust account software.
  7. Receipting is performed daily to keep up with the volume of transactions in and out of the trust account.

Strata Accounts

The top key unique identifiers of a strata trust account include:

  1. The account name is held in the name of the Owners Corporation (OC) or Body Corporate and managed by the agency.
  2. The type of account is a ‘joint account’ similar to an IBD account. This means the interest goes back to the Owners Corporation – not the Compensation Fund.
  3. The account does not contain the words ‘trust account’. You would generally see something similar to: My Real Estate Pty Ltd ATF: Strata Plan 123456
  4. There’s no ‘end of month’. You do not remit funds like you do in Property Management. However may still need to do a ‘close period’ on your monthly reporting. This is also dependent on the software package you use.
  5. Levies are typically sent on a quarterly basis to lot owners. This is also dependent on which state you are in and the agreement between the Owners Corporation.
  6. Receipting occurs on a quarterly basis. There may be other items that you need to receipt on an ad-hoc basis, including purchase of keycards or garage remotes.
  7. You still need to reconcile each OC account that you manage within the prescribed timeframe. Again, check your State legislation.
  8. Audits are mandatory where there are more than 100 lots, or the annual budget is above $250,000.
  9. In NSW, the OC may vote and elect to have the account audited by an independent auditor. This is at their own cost.
  10. The agency may need to complete an audit on their overall trust accounting practices. An auditor may randomly select 10 Strata Plans and conduct an audit on the practices of all the accounts. This can include checking timeframes for reconciliations, maintenance of records, banking of cheques etc.
  11. Individual OC accounts do not need an UID registration. Each individual agency however may need a UID to meet compliance in NSW.

If you are looking to expand your business and upgrade your license to include a strata license in NSW, contact our friends at ACOP. They will be more than happy to get you on your Strata way.

– 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.

What is the Deal with Interest Bearing Deposit Accounts?

Is the concept of an interest bearing account as foreign as snapchat? Have you been requested to open an interest bearing deposit account and are breaking out in a cold sweat? Is the process as intimidating as visiting the dentist for the first time in 5 years?

You are not alone (insert collective sigh of relief).

So what is an Interest Bearing Deposit (IBD) account?

Let’s break it right down to the basics.

An interest bearing deposit account is sometimes referred to as an ‘at call’ account. This is because the funds can be ‘called’ upon at short notice. It is a joint account often between two parties, the Seller & Buyer. It is where the 10% sale deposit is invested for a short term at a high interest rate.

With me so far? Not so intimidating now is it! Perfect.

Account terms are generally 42 days (the time between exchange & settlement). It can be longer depending on the settlement period.

The interest is generally split 50/50 on settlement between the two parties. There can be variances such as 100% to vendor or 80/20 and so on.

Who opens an Interest Bearing Deposit account?

A solicitor will put a request in writing on the agent to open an account. Your bank has a form you will complete which is part of the Pink Form process in NSW.

You will need both parties Tax File Numbers and full legal names as per the Contract for Sale. You do not need signatures. The agency itself will become the trustee for the Seller & Buyer.  An example account name is MY TOWN REALTY AS TRUSTEE FOR: JONES TO SMITH.

What is the rate of interest on an IBD account?

This varies from bank to bank.  It is generally not much higher than the current cash rate at the time of investment.

Can I open an account with any bank?

Yes you can. However for practicality sake, it’s much easier if you open the IBD account with the same bank as your Trust Account. Why make things more difficult?  Doing so will streamline the settlement process. Who doesn’t love things being streamlined?

What makes an IBD account different from a normal trust account?

A normal trust account does not earn interest that is available for the parties. Instead the interest on trust money is remitted to the relevant compensation fund (depending on which state you’re in). Settlement is performed from the trust account, not the interest bearing account. Therefore you can provide the parties with a statement of account.

Do I need to open an IBD for every sale?

No, you only need to open an IBD account when requested to do so by the parties solicitors.

What happens if the parties don’t provide their TFN?

You need to advise the parties that if they don’t provide their TFN that they will need to declare the interest in their next tax return. This usually does the trick pretty quickly.

What happens on settlement?

You will be made aware by the solicitors that the property is due to settle on a particular date. At this point, you will need to arrange to have the initial funds plus the interest transferred back to the trust for settlement.

Who audits IBD accounts?

Your auditor. Although this process happens outside the trust account, your auditor will still check you have followed the correct processes and accounted correctly to all the relevant parties.

So there you have it. The world of Interest Bearing Deposit Accounts explained. So go forth and open an IBD with confidence!

– 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.

Top 5 Tips to Keeping Your Trust Accountant

When you love something let it go. Yes, all very well and good in the world of romance. Just not for your trust accountant. That is why we dedicate this blog on keeping your trust accountant for good.

When you find a good trust accountant, you grab that baby, hold on tight and don’t let go! You see your trust accountant is the glue that holds the paper mâché together. They are the chocolate chip cookie that rounds out the perfect cup of tea. Get the picture?

Keeping good people is one of the biggest challenges in business. Finding them is the easy part in comparison. Once you find that perfect trust accountant that fits seamlessly into your business, you want to keep them happy to retain them as an employee as long as possible.

Trust accountants keep everything running smoothly in the background of your business. The sales and rentals business you make, all would not be possible without the efficient workings of your trust accountant.

So, what are the bug bears for trust accountants that may make them look elsewhere? We know a few, so we know what makes them happy and what makes them want to look for greener pastures. And the reality is, they are the common reasons all staff look to move on from an employer they are unhappy with. The good news? For good employers, it should be easy! Read on…

 Top 5 Reasons Trust Accountants Quit Their Jobs

  1. They are undervalued

    No one likes to feel they are not valued in their work. It doesn’t take much time to give a pat on the back, good job Suzy or highlight the successes of their work. Unlike the sales reps, trust accountants are not out in the frontlines. They are the ones handling the machinery and supplies so the frontline doesn’t fall apart at the seams.

  2. Lack of a well-deserved pay rise

    Not being a commission-based role, trust accountants can often be easily overlooked for a pay rise. As the point above, because their role is not directly linked to income generated for the business, they may not shine as brightly as sales-based roles. Yet, their star shines the brightest as without them, no one would get paid at all!

  3. Lack of training

    Quite often, trust accountants are not properly qualified for their role by no fault of their own. They may be introduced to the role from another part of the agency, or just not have any direct trust accounting experience. Either way, trust accountants can benefit greatly from regular training sessions and professional development. This way, they can keep up with new legislative changes and the latest innovations within the industry. So look out for any conferences and info sessions that may be applicable.

  4. Feeling left out

    Yep, no one likes feeling like they are on the outer. Yet, it is a commonplace feeling amongst trust accountants within an agency. As their main role revolves around crunching numbers, they can often be left out of agency-wide, business development discussions. Yet, because their main role is on the accounting side, doesn’t mean they don’t have some amazing ideas up their sleeve. We are looking at you Erin Brockovich.

  5. Lack of incentive

    Sometimes we all need a little incentive to help propel us forward. ‘Eat your greens and you can have dessert’.Finish this marathon and you can stop running’. From children, to marathon runners to trust accountants – we are all the same! That’s why KPIs are important. It is also important to see them not as an intangible goal – but ones that can be reached with hard work and dedication… and a little bit of guts.

So, pretty simple right? It’s not rocket science. Find good people and work hard to hold onto those good people and your business will thrive.

– 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.

Why Your Trust Accountant is Your New Best Friend

Some friends come into your life at different stages…

There are your childhood friends – the one that know all about you.

There are your school friends – the ones you grow up with.

There are your kids parents friends – the ones you trek off with to kids sport every weekend.

Then there is your Trust Accountant. Now this one is a keeper.

As a Licensee or Officer in Charge, there are a lot of facets to the day-to-day running of your business. How great would it be to have a friend you can fall back on in times of need? When invoices and receipts are piling up and reconciliations are falling further and further behind. That friend is your Trust Accountant – and they are the best friend your agency can have.

Top 5 Qualities of your Trust Accountant Best Friend

  1. They are dependable

    Your trust accountant isn’t going to do the runner when the going gets tough. They are here for the long haul. In fact, that is when they shine their brightest. End of Month will become a joyful experience as opposed to one that is fraught with dread and anxiety.

  2. They are privvy to the latest gossip

    By the latest gossip, we mean the latest in the rules and regulations regarding trust accounting best practice. No more being left in the dark. Never agin will you fear of being not compliant and left to your own devices in the playground. Your trust accountant will ensure you remain compliant at all times and your agency is meeting its regulatory requirements.

  3. They are flexible

    Outsourcing gives you more flexibility as you are paying only for the services you use. So not only are you creating a more flexible work environment, it is also a more cost-effective solution.

  4. They give you more time

    Outsourcing your trust accounting allows you to delegate those tasks of your business to the professionals so you can get on with more pressing issues. Instead of labouring over accounts and receipts, you can now spend the time building and growing your business.

  5. They know the latest trends

    No longer will you be left with last year’s stone wash denim jeans. Your trust accountant knows the latest technology and trust accounting software to ensure you keep up with the best of them. They work with trust accounts day in and day out, so they know the best innovations out there to ensure the job is as effective as possible. No doubt they will be attending Professional Development sessions and expos, keeping an ear to the ground for the latest innovations to help improve your business (and in turn make their lives easier at the same time!)

So, we shouldn’t need reasons to convince us of why we should keep a hold of our best friends. But hey, it was worth the effort. Because it helps you to see why your Trust Accountant truly is the best friend your agency could have – no matter what way you look at it.

– 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.

 

How to Maintain Good Tenant Retention Rates

Finding a good tenant is one thing. Tenant retention is another! Many would argue – “why should I care about the tenant?” Well, the truth is pretty simple. Tenants own properties too! They can, or may already be, landlords, purchasers and have a connection of friends and family with rental properties of their own.

So in short, yes you should care about the tenants! Without tenants, we would be out of a job. Harsh, yet true!  So how can we keep them happy? Truth it is pretty simple really.

I frequently look at reviews posted to Google regarding agents and property management agencies. Most of them are 1 star reviews. As we all know, people are more willing to post negative reviews than positive ones. Most are from disgruntled tenants whinging about the unfair treatment at the hands of their agent. Yes it is true – we cannot keep everyone happy. In a perfect world, yes. What is important is realising the small things that can go a long way in keeping the lines of communication open between agent and tenant. This way, the tenant receives a positive experience, is likely to remain on in the property, and more likely to rave about you to their friends and family.

So what are these magic steps you ask?

5 Steps to a Happy Tenant

  1. Tenant Portals

    Tenant portals are relatively new technology to hit the property management scene for cloud users. If every tenant had access to a tenant portal, life would be so much easier. Tenants can:

    • Log maintenance requests online
    • View the status of maintenance jobs
    • Download rent receipts
    • See all information related to their tenancy
  2. Tenant move in pack

    A move in pack will help your tenant not only be loaded with helpful information but also to feel a little special! Think of all the info you could include such as bin nights, emergency contacts and local area information. A definite essential for tenants who are new to the area or for interstate or overseas tenants. AirBnB do this well. You’ll notice AirBnB encourages hosts to leave a folder with key property information. The same protocol can be carried through to permanent rentals. It’s an extra touch that goes a long way. Try hitting up some local businesses to offer some free coffees, discounts or loyalty programs to recruit the tenants as new customers for their first week in their new property. Don’t be afraid to think outside the box!

  3. Explaining rental payments

    Taking the extra time to run through the lease agreement will save countless hours of questions down the track. Spending an hour or two walking through the new lease will allow your tenants to ask any pending questions and for you to clarify all aspects of the lease.

  4. Providing ongoing information

    Newsletters are a great way to communicate with your tenants. Changes to legislation, your agency, compliance issues (such as smoke alarms) or any tenant related matters are best in writing. As previously mentioned, outsourcing these details are often the quickest and easiest option. Outsource to a copywriter and use a user-friendly platform such as Mailchimp to send fully branded emails to your tenants.

  5. Surveys

    Surveys are a fabulous way to get to know more about your tenants. Plus, they are quick and easy (with the option of anonymity) for tenants to complete. Free tools such as Survey Monkey provide a user-friendly, branded platform with questionnaire templates to choose from to get you started. Choose from a pre-made questionnaire, or tweak it to make it your own. You can find out a host of information including: their communication preferences, whether they have other properties, their tenant needs and future plans. It can also provide an insight into how your agency is performing or where any weaknesses may be. Where do your Property Managers need to spend more time? What areas are you performing well in? Once again, it shows the tenant that you care about them and taking the time to understand their individual needs.

Happy wife, happy life. Happy tenant, happy property management agency!

– 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.

First Class Trust Management for Landlords

With the ups and downs naturally associated with the real estate sales market, it is important to take care of your rental roll clients. Your rental roll clients are the ones that will (hopefully) be there through the thick and thin of the sales cycles. When sales times are low, the rental roll keeps clicking along. Just the same, when sales increase, your rent roll still needs to remain a priority.

So this month we are focusing on providing exceptional trust management service to your landlords. When times are a bit tough, we have the chance to over-service our existing clients. Retention is just as (if not more) important than new business. And it helps to pay the bills!

A key gripe of many landlords is when things go wrong with statements and payments. Lapses in data entry can quickly escalate, break your agency’s reputation and send your landlords packing to another agent.

So what can you do to ensure your rental roll holds strong for the long term?

First Class Trust Management for Landlords

Landlord Portals

Portals have been around for some time. But the latest cloud technology portals has given us unprecedented access to real time information 24/7.  Even when your agency is closed. It’s a win for landlords and a win for agencies. It allows complete transparency and landlords can see everything that is happening with their property at any time (even while you are getting precious shut-eye).

Outsourcing

Outsourcing can greatly benefit both your agency and your clients. The outsourcing of Property Management can allow the generation of strong relationships with your clients whilst the other areas of the business are maintained. Tasks can include trust accounting, inspections and maintenance to name a few.  You would be surprised at how cost-effective outsourcing can be. More often than not, outsourcing can cost a lot less than employing an additional staff member to perform these tasks. In the end, it is what you decide fits best for your agency.

Statements

This is the general place we hit the most snags. Landlords seem to get the most bees in their bonnets when it comes to incorrect statements or they simply have trouble understanding them. It pays off to set the record straight with statements right from the beginning. If meeting with a new client, take a dummy statement along with you to work through it. Show them how to read it and understand it. Alternatively, record a video that they can look back on to remind themselves. Websites such as Freelancer have experts that can whip you up a quick informative video or cartoon presentation as a step-by-step guide to reading statements and understanding paid to dates, credits, income and expenses.

Information Sessions

Often you may come across a landlord that asks you to do something that’s against the Act or Regulations. If this is the case, you can often spend hours explaining the rules and regulations to them. What if you could do this en masse? Hosting an information session for your existing landlords is an effective way to walk through any common issues that arise including:

  • any upcoming legislative changes
  • how to maintain their properties to achieve the best rent
  • how to claim the most amount of money in their tax returns
  • any other risks or issues they need to know about.

When acting as Property Managers, we would hold information sessions on a regular basis. You can have guest speakers such as electricians to discuss and demonstrate the importance of correct wiring. Having licensed tradespeople attend these sessions can add a lot of value and keep your landlords well-informed. For those with interstate or overseas clients, you can live stream the session or provide a video on your social pages or enewsletters.

Phone Calls

Communication is vital in any relationship, especially with your landlords. They love to be kept informed. Imagine if you had the time to call your landlords just to say hello? Just for once for the phone call to not be about rent in arrears or some required maintenance. Taking the time to do this shows that you care about your clients. That they are not just a number. You care about them, the relationship, and their property. Plus it will minimise an influx of phone calls! Once again, outsourcing could be a good way to free you up to do this.

Password Protection

With fraud on the rise, password protection has never been so important. It is especially important when we are making sensitive changes to their accounts. We’ve already seen 2 cases of properties being sold with fraudulent instructions in WA and another case in ACT – ‘When Landlords Change Their Bank Details’.

Taking those extra steps to look after your rent roll clients will see this area of your business grow and thrive. It will help you get through the tough times and buoy you up in the good.

– 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.

Creating Processes for Batch File Payments

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:

  1. Overdrawing your trust and breaching legislation.
  2. Paying creditors or owners twice and having to ask for the funds back.
  3. 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.

A Reconciliation a Day Keeps the Auditors at Bay

This month we are revisiting our oldest friend, reconciliation. Because, no matter how much love and attention we give this friend of ours, they seem to be the one that requires the most attention. It is a commonplace to receive last minute calls at EOFY from clients who have not reconciled their accounts for the entire year. Hence the need to share with your our top reconciliation tips.

Whilst it is not a legal requirement to reconcile on a daily basis, it is always best practice. To prove our point, here are some previous musings on reconciling that we have covered in the past to get you up to speed.

Reconciliation Tips

Reconcile daily

Don’t leave adjustments sitting there for more than 2 months, particularly at around 30th June. Reconciling daily means you avoid end of month stress and avoid the snowballing of any errors.

Include the last day of the month

Reconciliation must be up to and including the last day of the month, even if it’s a Sunday! Fear not, this doesn’t mean the agency needs to work on a Sunday. It means you are showing to the auditors that you’ve captured all of the transactions for that month as per the bank statement.

If you can’t balance, stop and get help!

Don’t move onto the next month without reconciling. Doing so will create a snowball effect that will be even harder to amend.

Only present items that appear on the bank statement

For example, debits will be shown in your unreconciled withdrawals. Receipts will be found in your deposits.

Where to look if you can’t reconcile?

We all know the pain when we cannot reconcile. So where to look first?

  1. Check to see if you have entered the closing balance correctly.
  2. Firstly try the daily cashbook. Check to see if all entries on the bank statement match what has been receipted in the software.
  3. Check the reconciled withdrawals to ensure they have been presented in the correct month.
  4. Confirm the daily bankings have been posted to the reconciliation.
  5. See if there are any rejected payments on that day’s banking: ie: a rejected Bpay or returned funds.
  6. If all else fails – seek professional help!

The main thing to remember in regards to reconciling is don’t leave it until the last minute! You are treading water with both your own stress levels and risking a breach on your audit.

– 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.

Staying Compliant When Moving To The Cloud 

I’ve Gone Live…. Now What?

Last month we took you through the steps to successfully migrate your software in-house before the July 1st deadline. So at this point, you have successfully migrated your old software on a system-based server to a cloud-based server. Success! As an added bonus, you have maintained all your hair and not extracted a Coles week’s supply of chocolate (or wine…).

But now what?

We often get asked the same common questions from clients who have migrated their software internally.

They are (drumroll…):

  1. How long do I need to keep my old database open for?
  2. How long do I need to keep paying two subscription fess?

You will find that a majority of external companies will cut off your access to your old software almost immediately after you have cancelled your subscription. No love lost there. On the plus side, you can request ‘read-only’ access to the information. Legally this is your data. You are able to access it if requested by an auditor or relevant governing body.

So What Do You Need To Do To Stay Compliant?

  1. Keep a record of your final EOM reports from your old software.
  2. Keep a record of your opening reports from your new software. This will enable you to prove the two balances match.
  3. Keep a copy of all tenant and landlord ledgers from old software. This is super important to refer back to for any tribunal or compliancy matter.
  4. Keep a copy of all final EOFY statements from your old software.
  5. Retain all trust reports as normal.  Refer to your relevant state legislation for the time period of which these need to be kept.

Recommended Time To Keep Old Database Active?

We recommend to keep your old database open until after your annual audit or for another 2 months post migration. Whichever comes first. This will give you the added comfort knowing there is nothing else you have forgotten to extract from the database. Like the Irish say… ‘to be sure, to be sure’. 

And last but not least, keep a copy of your final backup and all of your reports securely on an external device or in the cloud.

– 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.

Inhouse Software Migration Checklist

Your Software Migration Checklist to meet the July 1st Deadline

Switching to a cloud-based server before this financial year? July 1st is the ‘go live’ deadline to make the switch from old system-based servers to cloud based solutions. Our migrations team have been tirelessly working around the clock this month to ensure we meet the 1st July ‘go live’ deadline.

For those agencies managing the process in-house, we have created a software migration checklist to help manage the process.

For the lucky ones…

If you are lucky enough to have chosen a cloud solution that has a ‘migration tool’, you are in luck. It will simply copy across the data from your existing software to your new software. Unfortunately, not all cloud solutions have this migration tool. Reason being the data from the server based program is not built for extracting the data. So you are left to manually key in data. All is not lost though! Here at Angel HQ, we live by the motto: “Key It, Don’t Convert It”.  You’ll benefit from starting fresh with your new database by keying in the data cleanly.

So here it is, our software migration checklist to make the process nice and simple.

Pre-Migration Checklist

  • Firstly, archive all old creditors.
  • Secondly, decide if you’re going to migrate all properties including archived or just active properties. Archive any records that you do not wish to bring across to the new system.
  • Check payment frequency has been entered into the old system for owner disbursements.
  • Update property records with bedroom, bathroom & car space information.
  • Ensure to update client contact cards with relevant information.
  • Update all bond amounts in the ‘received’ field and enter bond reference number from the bond authority.
  • Complete inspection dates
  • Enter rent increases, vacate dates and key numbers.
  • Keep up-to-date. Watch tutorials and encourage staff to engage in online forums, webinars and other training to help them prepare for the changes ahead.

Post-Migration Checklist

  • Check paid to dates (you may need to update them again manually before going live as they may be different).
  • Ensure all users have access.
  • Update stationery with logos, footer, headers and update email signatures.
  • Enter direct entry user details in the settings for your banking (otherwise you will not be able to create EFT files).
  • Check ALL fees for each owner (yes, it’s a painful process but it’s better than losing a management due to charging incorrect fees).
  • Check rent increases have come across or enter manually
  • Enter outstanding disbursements have come across or enter manually
  • Check outstanding invoices have come across or enter manually

On the Day of EOM

  • Receipt as per normal in your old software.
  • Complete EOM as normal and pay out ledgers as close to $0 as possible.
  • Use your closing bank statement, EOM Trust Reconciliation, trial balance, unpresented deposits, unpresented cheque list and adjustments report to enter your conversion balances. You may need to load the balances in manually depending on your software.
  • Finally, double check your conversion balances in the new software. Ensure they match your closing balances in the old software and accept figures.

– 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.

The 10 Top Trust Accounting Software Features of the 21st Century

We love software at End of Month Angels. If you haven’t noticed, it is something we are very passionate about! We love that software can help to simplify our lives. It makes things easier – instead of harder. Now who wouldn’t love that?

Over the years we frequently discuss the importance of software compliance. Just check out a few of our favourites below…

Another key role of your software (and one we may not discuss often enough) is the role it plays in your day-to-day operations. Does it make your life easier? Is it up to 21st century standards to ensure your Property Management or Sales Department is running at peak efficiency? If you answer no to any of these questions or feel your current provider is not living up to expectations, then it may be time to make the switch. To help you, we have listed the 10 Top Trust Accounting Software Features of the 21st Century. Keep this by your side as you measure how your current trust accounting provider stacks up.

Top Features to Look For in Your Trust Accounting Software

  1. Landlord portal

    Allows your clients to view statements, financial activity, pending bills and information about their property

  2. Tenant portal

    Allows tenants to download copies of their receipts, log maintenance requests and view tenancy history.

  3. Built-in inspection app

    Allows you to plan and book your inspections in a few clicks. You can send correspondence to tenants via email or SMS and book maintenance requests on site. No more formatting reports when you get back to the office. Simply send the report back to the landlord immediately after the inspection.

  4. Cloud backup

    Do away with clunky outdated backup systems and let the cloud do all the work.

  5. Document management

    Easily store copies of notices, rent increases, leases, management agreements and other crucial documents against the property. This makes it simple to locate rather than storing in a paper file or on your server.

  6. Invoice scanning/barcode reader

    Scan your invoices and the software reads the information from the barcode including property address, amount and biller. This saves time from entering hundreds of council and water rates pre-end of month. The minutes taken to scan invoices can save hours of data entry.

  7. Import transactions files

    Receipt your daily bank transactions by importing payment files to your software from the bank. Receipting is complete within minutes and reconciling is a breeze.

  8. Journal function

    The simple ability to journal funds between accounts is a handy thing to have. We like to think that mistakes don’t get made. But in reality, they do.  Journaling funds isn’t just for fixing errors. There may be other situations where you need to transfer funds between accounts, such as owners transferring funds to more than one of their properties.

  9. SMS function

    The SMS function allows you to message your clients directly, making communication in general a lot easier. You can save records against the property and it makes arrears management much simpler.

  10. Easy EOM Process

    How long does EOM take with your current software? In 2018 standards, it should take less than 30 minutes from start to finish. This includes processing disbursements, sending statements, uploading payment files to the bank and rolling over the system. What about your paper usage? Do you have to cut down a tree every EOM just to print all the reports? Remember it’s not necessary to print all of your EOM reports as long as they are in visible form. This means that you can save them within the software and access them at any time. You can even provide your auditor with their own login where they can view and download the reports at audit time.

So there are our top 10 software necessities for the 21st century. How many can you tick off the list?

– 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.

 

5 Must-Have Productivity Hacks for the 21st Century Real Estate Agency

Running a Real Estate Agency is hard work. If there are tools out there that help save you time and increase your communication between staff and productivity you’d want to know about them right? We thought so. So we have our top 5 productivity hacks that will help your agency improve its processes and increase productivity. Better yet, they’ll help you rise above and beyond the competition.

Let’s do this.

  1. Slack

    Slack is the ultimate team communication tool for the 21st Century. Put simply, it’s a professional chat platform that enables staff to communicate internally between one another. You can chat about various topics and upload attachments. You can even create separate channels such as sale and rental properties and invite specific staff members to each. It eliminates copious amounts of internal chain emails that clutter up your inbox. This leaves your inbox clean, uncluttered and free for genuine client emails.

  2. Last Pass

    We have discussed the merits of Last Pass in the past. Last Pass is an online password manager that stores all your passwords offline. Not only that, it can generate strong passwords to use across all your accounts. The main advantage to Last Pass is by being an online system, you will always have access to your passwords as well as the added security knowing they are well protected. Last Pass offers both a free and paid subscription for full employee access. Voted one of the top secure password managers of 2017, Last Pass creates and stores passwords effortlessly and are on tap whenever you need them.

  3. Hootsuite

    Hootsuite is your one stop social media manager shop. It allows you to link all your social accounts in one useful tool. Instead of posting to each individual account, you can now post once and feed that post out to all your accounts simultaneously. The customisable dashboard allows you to see all your accounts at a glance, according to your preferences. The free version allows you to link up to three accounts, with four or more accounts needing to upgrade to a paid subscription. Hootsuite saves so much time from logging into separate accounts and posting the same content over and over. Keep your content fresh and relevant by reviewing the share-worthy content and suggested hashtags on the dashboard. For anyone with social media accounts (aka everyone) Hootsuite is a must.

  4. Freelancer

    Freelancer offers a brilliant platform to tap into an amazing talent pool of designers, copywriters, researchers, developers and data entry experts. It allows you to outsource many tasks within your agency for a fraction of the cost of hiring temps. Think about those jobs you would love to outsource such as building contact lists, preparing CMA’s, preparing leases, writing blog content, managing social media accounts, website management, designing logos/business cards/flyers/signboards, creating advertorials… the list goes on! The fees are relevant to the project budget you allocate so what you spend is completely up to you.

  5. Quotient

    Quotient takes the hassle out of formatting and preparing client proposals. You can set up multiple quotation templates including marketing packages, property management or sales proposals. It also enables you to see when a client views each document. Even easier for your clients, they can choose items they wish to accept within the quote and accept on the spot. Everything can be sent to your client at once including terms and conditions, agency agreements and any disclosure statements.

So there you have it. Our top 5 productivity hacks that every agency needs to know and get on board with. By implementing a few awesome apps and platforms into your agency, you’ll save time, increase productivity and wonder what you ever did without them.

– 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.

Are Server-Based Bookkeeping Systems Dead?

Just as the real estate industry is undergoing a shift towards cloud-based solutions, the accounting industry is also progressing onwards and upwards since the introduction of Xero back in 2007. It’s time to say goodbye to server-based bookkeeping systems.

Our bookkeeper Wonderwoman and Office Manager Tracy is both Xero certified and a registered BAS agent. This month, she gives us her insights as to why Xero is the perfect solution for Real Estate agencies looking to streamline their accounting processes from 1st July 2018.

Top 8 Reasons Why Xero is the Leader in Online Accounting Systems

  1. Firstly, most trust accounting software packages talk to Xero.  This is particularly useful for agencies and their income and reimbursement reporting. Xero also allows for better tracking as transactions are pushed across to Xero for monthly income and expenses. This includes Property Management fees, agent management fees, advertising and agent reimbursements.
  2. Staff can enter their own leave requests directly into Xero for Director approval. They can also download their own payslips.
  3. Easy to track employee working hours as staff can enter time sheets. This assists businesses to keep a track of hours their staff are working, even when on a salary.
  4. If a supplier you use also uses Xero, they can send invoices using Xero keys which automatically loads their invoice into your draft purchases for approval.
  5. Say goodbye to clunky server-based systems! You can now save all copies of invoices and align with the relevant purchase.
  6. Staff can load their reimbursements by taking a photo of their expenses for Director approval.
  7. There is no EOM rollover process and no EOFY process with Xero. The only EOFY process you need to do is employment summaries. This means no rush to ensure everything is correct and done in order to roll into the new year.  This gives your accountant a few months to do your end of financial year and its as simple as locking the period to ensure no changes are done with your data. Whats great about this is it means you can always see your previous years data, invoices and reports without having to install or open backups.
  8. You can create bank rules directly from your business account. This saves time by avoiding manual data entry of expenses and income as well as reducing incorrect coding. Bank rules are perfect for transactions under $82.50, where the bank statement is adequate record for tax purposes.

Customer Question

I’m running my expenses through Excel. Why do I need a software package such as Xero?

When tracking expenses, there are many items that do not have exactly 10% GST. Unfortunately, excel cannot quickly identify these errors. Xero allows you to see each expense on the screen and the ability to code the GST accordingly. Plus Xero has a recode option if you are an advisor, this means you can recode the source transaction if you find an error, saving you time and money.

GST Continued…

Agents need to be mindful of contractors supplying invoices without valid ABN’s. It is an Agent’s responsibility to ensure that a supplier’s ABN is checked and include GST if they are registered for GST. If you find the ABN is not registered then you must withhold 0.49c for each $1. You are then required to do a PAYG payment summary – withholding where ABN not quoted.

Some Final Pointers…

Xero accounting is a simple and easy to use system. All you need is the right training.

Using a registered BAS agent enables an extension on your lodgement and payment for your BAS.

Do you Employ More Than 20 Staff?

As of 1st April, if you employ more than 20 staff, you must enrol for single touch payroll from the 1st July 2018.  This is not negotiable, it is the law. Now is the perfect time to clean up your existing database and archive old staff members to avoid getting caught out!

Have You Done Your Financial Year Prep Meeting With Your Accountant Yet?

Finally, the 30th June is fast approaching. This means it is the perfect time to look at your business at a whole, look at your income and expenses and see how your business is operating. Are you running at a profit? Are you investing that profit back into the business? Don’t forget the $20k instant asset write off for entities with a turnover of less than $10 mil finishes on June 30.

– 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.

New Age Trust Accounting & Bookkeeping 2018 and Beyond

Are Server Based Trust Accounting Systems Dead?

We are always scared of things we don’t know. What one day terrifies us because of the newness and unfamiliarity, soon becomes second nature over time. Cast your mind back to 2015 where the development of new age Trust Accounting & Property Management systems in the cloud began. Skepticism was rife with agencies terrified of switching software providers simply due to the fact that it was unknown territory.

Look at us now.

Huge leaps and bounds in development in a relatively short period of time have seen cloud-based systems become the norm. This massive shift in the accounting landscape has seen preferences now leaning towards cloud-based systems as opposed to server-based systems.

Out with the Old

But what about my server-based system you ask? Server based systems are clunky, old, expensive to run and inefficient.  They hinder and do not help the processing of transactions and general day to day running of a modern day Real Estate agency.

This is even more evident now with the recent roll out of NPP. With such changes in technology, the industry needs software that can cope with the upcoming changes that lie ahead for the banking industry.

10 Reasons to Choose Cloud-Based Trust Accounting and Property Management Software

  1. Cutting edge technology

    By utilising the most recent technology, you demonstrate to clients your dominance over your competitors. This is especially pertinent with tools such as Landlord portals which increases agency/client transparency – all big ticks on potential clients’ lists.

  2. Streamlines arrears management

    Cloud-based software simplifies processes. No longer do you need to chase tenants for processes such as issuing rent receipts. It allows you to communicate with tenants much more effectively and easily.

  3. Systemised invoicing

    Invoicing at the click of a button. Of particular benefit is the ease of invoicing tenant water usage charges.

  4. Improved management of landlord expenses

    Cloud-based software allows you to track bills and easily provide copies of bills to the owners for taxation purposes.

  5. Receipting rent and reconciling accounts

    It now takes a quarter of the time to process the daily rental download compared to server-based software.

  6. Simplified workflows

    Property Managers rejoice. Due to simplified workflows around inspections and maintenance, Property Managers have more time to get out and build relationships with clients. As compared to spending ineffective time in the office bogged down with processes and time delays.

  7. Minimised Time Wastage

    Cloud-based systems cut down wasted time spent on EOM reporting. It keeps a visible copy of records in the cloud as opposed to printing a hard copy. Both good for time management and for the environment.

  8. Process payments at the drop of a hat

    Now you are looking at five minutes to run a disbursement as opposed to 30 minutes. Boom.

  9. Easy Backups

    Cloud systems perform backups with ease at no additional cost for storing the data. In most cases, depending on the size of data, you can save up to one hour in the time a cloud-based backup takes as compared to a server-based system.

  10. End of Month rollover

    We’ve saved the best til last. End of Month rollover takes two minutes. Yes, two minutes. Not two hours  (providing you’re already reconciled).

Here at End of Month Angels, we have recognised for some time that the future is cloud-based systems. To remain as industry leaders, we need to reflect the changes in the industry within our own business. We have consequently made the decision to cease supporting server based solutions from 1st July 2018.

When will we see the server based system die completely?

This is a hot topic of debate in our office. Jerome, our Operations Manager and IT Guru predicts that server based software will be completely dead by 2020. Other team members still believe that server based systems will kick on for a few more years stretching out to around 2025.

So What Should You Do Next?

If you are currently with a server-based system, now is the time to start thinking about the future. The 1st July is rolling around again and there’s never been a better time to switch your software platform. Our best advice is to do your research now and be prepared for the changes ahead.  The reality is that technology will change, and will continue to change again and again.  Eventually, cloud solutions will be the only option.

We can’t tell you which solution is going to be the best fit for your agency. Only you can know that. But here are some articles that may assist you to make the decision.

Don’t be afraid to embrace the new, as before you know it, it will be second nature.

Real Time Banking New Payment Platform

The Future of Online Banking

Reports released by the Sydney Morning Herald and Better Banking report that 3 out of the 4 biggest banks will roll out a New Payments Platform (NPP) offering real time payments. This new payment platform will allow customers access to clear funds in less than 1 minute as opposed to the existing 2-3 days.

What is NPP?

Gone are the days of a BSB and account number. Customers will instead have a unique ID which links to an email address or mobile. Still in the testing phase, the big banks are trialling the new system on a select group of customers to iron out any glitches and ensure the smooth and successful roll out to all customers.

What does this mean for the future of Real Estate and Trust Accounting?

  1. No clearance waiting times

    No more waiting for 24-48 hours for funds to clear. Real time payments will clear 7 days a week – whether it be a weekend of a public holiday.

  2. Instantaneous Transactions

    Sales settlements will now be instantaneous with vendors not needing to wait 2-3 days to receive funds. Landlords will also receive their funds instantly. This will hopefully eliminate the annoying ‘when am I going to get paid’ phone calls!

  3. Greater transparency

    With instant payments, everyone knows where they stand. Payments are instant so assurances of payment are transparent – both in and out of your account.

  4. Quicker Rental Transactions

    With instant payments, rental funds will clear quicker, minimising rental arrears, which in turn will minimise admin time.

  5. Greater Character References

    NAB reports on their website that 280 characters can be included as a reference for each payment. This will hopefully minimise unidentified deposits with confusing or completely missing references.

  6. Simpler Tracing

    Tracing transactions is due to be a much simpler process. Reports can be generated in seconds such as a calculation on monies paid to a particular supplier.

There are of course the skeptics and some potential downsides to the NPP. There is the fear that the real time payments will bring an elevated level of risk for cyber fraud.  The fear lies in the premise that by the time it takes to detect the fraud, the money has gone, as well as the potential for hackers to steal log-in identities and break into accounts. REI NSW reported an article on a Sydney agency losing $757, 000 from their account right in front of their eyes. As with any system, it is important to check your systems you have in place to protect yourself against any form of cyber theft.

We will wait and see what the full roll-out of the new payment platform brings. Above all, ensure your correct security systems and level of authority are in place to protect yourself and your business from any new form of cyber crime.

– 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.

The Beauty of Bulk Bpay

Oh how times have changed. Rewind the clock back to 1997 when the Spice Girls were on every tape player and double denim was a big hit.

I was also entering the industry as a fresh-faced real estate newbie. Back then, everything was done via cheque = a major labour intensive process. At the end of every month, I would have to physically walk to the post office with over 600 bills. I would then proceed to stand in line (always a lengthy one), and pay them by cheque. Low and behold, if there was an incorrect cheque or oversight, I would walk back to the office and correct the error. (Let’s say commercial real estate near banks was hot property back then). The process of cheque writing would often take days and then collating everything could take up to a week.

Now let’s fast forward to 2018.

The Spice Girls are a distant memory (sort of) and yet double denim is threatening to make a comeback.

The birth of bulk Bpay

However thankfully now we live in a world with bulk Bpay. The sad news is that only 5 banks support it:

  • Macquarie Active Banking
  • Westpac Payments Plus
  • Commbiz
  • ANZ Corporate
  • NAB Connect

It is so important to choose a bank that is well suited to trust accounting. We have previously discussed 7 things to consider when choosing or switching banks for your real estate trust accounts. Added to the list is access to bulk Bpay.

Why is bulk Bpay so amazing for trust accounting?

Bulk Bpay is a heaven send for trust accounting for several reasons:

  1. It completely eliminates the need to write cheques.
  2. It automatically syncs with your trust accounting software.
  3. It’s simple to process with the press of a button. You can pay more than 500 bills at once simply by importing one file from your software to your banking platform.
  4. There is less room for human error.
  5. Bpay funds are processed the same day you pay the bills. Gone are the days of waiting for cheque clearances.

What if you are not with a bulk Bpay bank?

You bank with St George – can you still process Bpay payments? The answer is yes, just not bulk Bpay. This means you have to manually key in each biller code and reference number to process invoices. The absence of bulk Bpay means your bank will not sync with your software to produce a compatible Bpay file for import. By the time you process each transaction manually via online banking, you could write a cheque. Purpose defeated.

Our recommendation?

Look into switching to a bank that offers bulk Bpay. The time and effort you may invest now will pay off a thousand fold down the track when you can process hundreds of transactions with the push of a button. If you’re thinking of switching banks to accommodate bulk Bpay then read our blog on 8 steps to switching banks and staying sane to help your decision-making process.

Our preferred bank?

Our choice would be Macquarie, Commbiz or NAB Connect. We use NAB Connect in our office and use bulk Bpay on a regular basis. Our clients report that Westpac Payments Plus is difficult to set up with numerous hoops to jump through to implement the system.  Additionally, ANZ corporate is prohibitively expensive for an agency with less than 1000 rental properties.

Ultimately the choice is yours, but we are here to help with any questions and assistance along the way.

– 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.

New Property Licensing Training Requirements – Prepare for the Changes Ahead

Getting to Know the New Industry Qualifications

Discussions surrounding the reform of Property Licensing NSW started in 2016. Fast forward to 2018 and we are now looking at the implementation of these reforms, likely to be later this year. Of note is the introduction of three categories of qualifications as opposed to the existing two.

  • Certificate of Registration
  • Licensed Real Estate Agent
  • Licensee in Charge

So what does this mean?

Certificate of Registration

  1. We will see an extension of the Certificate of Registration (COR) course for new entrants into the Property industry. COR holders will have four years to upgrade to a full license from the implementation of the changes. A 12 month operating exclusion will face those who do not upgrade within the four year deadline.
  2. Those COR holders looking to upgrade to a full license must hold a Certificate IV in Property Services and demonstrate 12 months practical industry experience.
  3. COR holders will not be able to sign agency agreements, leases or undertake trust account transactions. To be valid, these items are now required to be signed or authorised by licensed agent.
  4. If your Property Manager, Sales Agent or Trust Accountant currently holds a COR, they will need to upgrade to the license category to be able to sign leases, contracts and agreements. Only Licensee in Charge holders will be able to authorise trust account transactions.
  5. Administration and reception staff will be exempt from holding a COR.

Licensed Real Estate Agent

  1. The Buyers Agent and Onsite Residential Property Manager license categories will no longer exist.  If you hold one of these licenses, you will need to upgrade to a full license before implementation of the changes.
  2. Current renewal period for licenses is one year. You will now have the choice to renew for one or five years.
  3. CPD for License holders will go from 12 points to 6 hours of mandatory training per year.

Licensee in Charge

  1. The Licensee in Charge is currently a Certificate IV level of attainment. It will be upgraded to a Diploma level certification.
  2. If you are wishing to upgrade from a ‘License’ to a ‘Licensee in Charge license’ you will need to demonstrate 2 years experience with a licensed business.
  3. License CPD for Licensee in Charge holders will go from 12 points to 9 hours of mandatory training per year.

Beware of Shady Training Providers

Unfortunately there are shady training providers out there offering quick and cheap qualifications. Don’t fall into their trap! Fair trading will monitor quality of training delivered by Registered Training Organisations (RTOs). They also have the power to immediately suspend or cancel a license or COR issued in error. So before you sign up for that quick, online $99 course, think again! It may not meet training requirements and will be money and time down the toilet.

What can you do to prepare yourself now?

Speak to our friends and partners at the Australian College of Professionals (RTO #91513) about how you can complete the necessary training requirements before the changes are implemented. Depending on your existing skills and qualifications, you may be eligible for Recognition of Prior Learning (RPL) on some aspects of the licensing course.

End of Month Angels have an existing relationship with ACOP and therefore have been busy preparing for these changes. Our staff have been working towards obtaining their licenses and will all eventually hold a Licensee in Charge qualification. This means, once the changes are implemented, all members of our team can assist our clients who do not have their internal staff qualifications up-to-date. Contact us to discuss how we can assist your team in preparation for the changes.~

– 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.

 

Opening a New Trust Account – Preparing for Changes Ahead

Earlier this month we discussed the upcoming 2018 trust accounting reforms as outlined by NSW Fair Trading. Of significance in these reforms was the introduction of the need for a separate sales and rental trust account.

For those who already operate with separate accounts, you can pat yourself on the back, close this tab and grab a cup of tea, safe in the knowledge you will meet this compliance item. For those who aren’t so lucky and have the one trust account for sales and rentals, then we have compiled your to-do list. Follow these steps and you too will soon be kicking back happy in your compliant state.

  1. Register the new trust account with OneGov

    New legislation from 2015 requires all licensees to have UINs for all trust accounts. Once registered with OneGov, you will be issued with a Unique Identifying Number which you are required to give to your authorised deposit-taking institution (ie – your bank). If in doubt about how to go about this, check out our blog for detailed instructions on meeting new guidelines for trust accounts.

  2. Yep, you read the order correctly

    It does seem odd that you need to register the trust account before physically opening it. But it is correct. You will need to supply the registration number to your bank upon opening the trust account. You will also need to have the Unique Identification Number form stamped by the bank and retained in your audit file for compliance.

  3. Open the trust account with your nominated provider

    Before you make your final choice, it is always wise to check the list of Approved Deposit Taking Institutions as per the NSW Fair Trading website. The list can change and is updated regularly.  Check your chosen bank is on the list. If not, you will need to switch banks with one on the list in order to open a new account.

  4. Have hardcopy deposit and cheque books

    As much as we love technology, we also love back-ups when technology fails us. Insist on a deposit book and trust cheque book for the new trust. As trust us (no pun intended) that there will be times you need to write out a hardcopy deposit or cheque. Don’t do away with the old just yet!

  5. Ensure the account is set up correctly

    Your new account must be set up as a proper statutory trust account NOT a business account. Ensure your business banker is fully across this distinguishing difference. The account name MUST contain the words “TRUST ACCOUNT”. For example, Tom Jones Pty Ltd T/as Jones Real Estate Trust Account. This is a requirement under the Property, Stock & Business Agents Act 2002. Additionally, your cheque book and deposit book (as you have duefully received as per the point above) must also display the same account name.

  6. Get the stamp of approval

    Don’t forget to get the OneGov form stamped by the bank.

  7. Direct your fees accordingly

    Ensure all fees relating to the new trust account are redirected to your general trading account.

  8. Retain all Records

    Retain all banking records on file for presenting to the auditor or Fair Trading when required.

That is the banking side complete. Once you have worked through these steps, the next plan of attack is to correctly enter these new trust account details into your trust accounting software. For those with existing software providers, you may need to upgrade your software to accommodate the additional trust account. For those not using trust accounting software (eeekkk!) we strongly advise that you do so! To get you started, we have the Top Questions to ask your New Trust Accounting Software Provider.

The new changes may seem annoying and costly to begin with. But they will have a positive effect in the long-term with clearer processes and transparency.

~ 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.

2018 Trust Accounting Reforms – What to Expect

Over the last 2 years, there has been discussions, heated debate and submissions to NSW Fair Trading regarding various aspects of the Real Estate and Property Services industry. Last year we blogged about the ‘The good, the bad and the ugly’ components of the proposed reforms that lay ahead.

A recent reform paper published by NSW Fair Trading has bought to light what we can expect in regards to the 2018 trust accounting reforms. The proposed changes are due to take effect in late 2018. We understand people can be resistant to change, especially when they have been operating the same way for many years. However, with the amount of general audit breaches and fraud cases we worked with throughout 2016 and 2017, we wholeheartedly agree with and welcome these changes. These changes will see more accountability required from licensees, which can only be a good thing.

So let’s get acquainted.

A Summary of the 2018 Reforms to Trust Accounting

Reform to account to all landlords at the end of the month

This new reform requires an account to all landlords at the end of each month unless specifically instructed not to do so. Last financial year, NSW Fair Trading paid out $2.4 million from the Property Services Compensation Fund. This new reform is aimed at attempting to reduce the loss from failure to account to a landlord across the board.

Agents must hold a separate sales and rental trust

This reform may not come as a surprise to many as this is often common practice. It is now just a requirement.

Submit all audits

This reform sees us revert back to 2013 legislation whereby all audits are to be submitted to Fair Trading. Whether they are good or have been qualified, they are all to be submitted.

The online portal system and lodging audits

2018 will see the establishment of the online portal system for lodgement of audits. The obligation to submit will be by the auditor. Fair Trading will also have renewed power to suspend licenses. They will have the power to suspend licenses for failure to lodge an audit or if there is a current fraud investigation underway.

Greater transparency

Once again, another welcomed reform change that will see the requirement of greater transparency of fees to clients. Everyone knows where they stand and this will wipe out any rogue and unethical behaviours.

Level of responsibility

The final and most welcome change is Certificate of Registration holders will not be able to handle trust monies.  Only those holding the ‘Licensee in Charge’ license category within an agency will be able to authorise trust account transactions,. This is a welcome change in helping to make licensees in charge more accountable for the financial transactions within their agency.

~ 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.

Minimise Your Risk in the Recruitment Process

How to Avoid Falling Victim to a Bad Hire

The recruitment process is on our mind this month. But it is most definitely not a new topic.  We’ve been blogging for years about the occurrence internal misappropriation of trust money by agency staff.

Take a look:

The unfortunate reality is that Property Managers and Trust Accountants may be ripping off your business, and clients, right under your nose. And you may be none the wiser. And it happens a lot more than what you might think. In 2017, we handled more agency fraud cases than was acceptable.

The truth is that you can avoid many fraud situations at the initial recruitment stage. It begins with a good initial recruitment process. Taking your time to find the right staff. Not rushing and employing staff in times of desperation and haste. By following good work processes and not resorting to bad business management.

5 Items to Tick off in your Recruitment Process

  1. Set a minimum experience level

    This will ensure you are interviewing experienced and knowledgable staff. We work off a minimum of 5 years in either accounting or real estate.

  2. Always ask for original copies

    Ask your potential employees to bring along original certificates and licenses. Unfortunately sometimes these can be fraudulent. Better to ask than to find out the hard way. 

  3. Cross Check!

    And no you are not being over-the-top. Cross check each certificate/license number online with your local governing body for previous reprimands or disqualifications. If your applicant is in NSW, ask them to provide copies of recent CPD training to ensure requirements are being met. 

  4. Police Checks

    Advise applicants they will require a police check to apply. Once again, this is completely in your rights and in your best interest. It is a sound risk management practice. After all, your employees will be handling your client’s money so every effort is worth it. And it’s your business that is on the line. 

  5. Don’t rush

    Never be too desperate to hire staff. Good decisions are never made in haste. It is always better to wait for the right candidate than a bad hire. It will cost you thousands, as opposed to more days in order to find the right fit. 

Bonus Tip

INSURE INSURE INSURE! As a business owner, this is imperative. Check the cover on your business insurance policy. Make sure you’re covered for internal ‘Theft by Employee’. Check what the restrictions are on the excess. If in doubt, always ask and clarify. 

~ 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. Trust End of Month Angels and get back to what you do best – growing your business.

How to Avoid a New Year Recruitment Drive

New Year Resolutions or New Year Job?

The New Year brings not only New Year Resolutions in the bucketloads, but also a lot of thought about current employment options. It’s a time where people decide to stay put if they are happy in their current role, or to make a change.

We see many Trust Accountants decide to move on from their current jobs at this time of year. We have previously discussed, the Top 5 reasons Trust Accountants leave their jobs. Similarly, Property Managers generally feel the same way this time of year. And there are many similarities between the two in their reasons for leaving. 

Top 6 Reasons Property Managers Leave Their Jobs

  1. Stress

    Property Managers can bear the brunt of excessive stress in their role. They are the recipients of pressure from multiple directions including tenants, landlords and management. 

  2. Lack of Incentive

    The commission structure for Property Managers can be far below inviting. This therefore gives zero incentive to Property Mangers to bring in new business. Lack of incentive = lack of new business = minimal job satisfaction. 

  3. Excessive Workload

    The portfolios of Property Mangers is often too large for the capacity of a single person to manage. Property Mangers often don’t have the support staff they need to keep up with their workload. 

  4. Lack of Support from Higher Management

    It’s no secret that management can often focus more on property sales as opposed to management. Put simply, there is more money to be made. Property Managers can therefore often feel bridesmaids to the Sales Manager brides.

  5. Out-of-date Resources

    Often, Property Managers are lumped with the old adage ‘if it ain’t broke don’t fix it’ and are consequently stuck using technology that belongs in the dark ages. 

  6. They are overworked

    Property Mangers are often requested to do the role of multiple people. They are required to not only manage properties, but to also take on the role of the Trust Accountant. For the same pay. 

Is Your Property Manager or Trust Accountant on the Brink of a Walk Out? 

As the New Year rolls in and people trickle back to work, you could find yourself looking for a new Property Manager or Trust Accountant. We have already had 4 calls this year from Agencies who have lost their Property Manager or Trust Accountant before the year has even begun.

So, here is the question. Is it a Property Manager that you need or a Trust Accountant?

You Need a Trust Accountant

If you need a Trust Accountant, you need someone to:

  • Receipt rent
  • Reconcile accounts
  • Process invoices
  • Handle daily banking
  • Handle general account enquiries
  • Process water usage and other tenant charges
  • Data entry
  • Process payments to landlords, suppliers and management fees
  • Run End of Month accounting processes

Your Need a Property Manager

If you need a Property Manager, you need someone to:

  • Lease properties
  • Process applications
  • Routinely inspect properties
  • Sign leases
  • Manage ingoing and outgoing inspections
  • Handle maintenances
  • Manage vacancies
  • Renew leases
  • Increase rents
  • Handle general tenant and landlord enquiries
  • Chase arrears
  • Attend tribunal
  • Obtain new business…

the list goes on!

You can see where grievances occur when Property Mangers are asked to take on the role of the Trust Accountant. Where could it possibly fit in? (Without your Property Manager, most rightfully, simply losing it).

So, our aim here is to avoid any loss of key personnel at this time of year. You want to retain your good staff. The loss of good staff can be far more costly to your business than the cost of reducing the stress on your existing staff. Consider this:

  • Can the trust accounting be outsourced?
  • How about outsourcing other generic tasks? Think inspections, maintenance, arrears handling, lease preparation… Outsourcing these duties will free up Property Managers to do what they do best.

Get 2018 off to a good start. Let it be the year of proactive change. As opposed to chasing your tail after staff have walked out. Let 2018 be your year.

~ 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. Trust End of Month Angels and get back to what you do best – growing your business.

We are Hiring! Are you the Trust Account Specialist we are looking for?

Seeking Trust Account Specialist for Boutique Rozelle Office

We are on the lookout for an awesome Trust Account Specialist to join our team. This is a unique opportunity to become an integral part of the End of Month Angels team and make your mark in the trust management industry.

The Role

  • Specialist full time role dealing with trust account management for rental properties.
  • Service a number of important client accounts using a variety of trust accounting software.
  • Diverse role includes reconciliation, training and project based assignments.
  • Provide true value add to clients. Assist them to set up best practice trust management procedures, alleviate costs and unlock hidden revenue.

The Benefits

  • An opportunity to be heard and make a greater impact within a business.
  • Less client contact, work behind the scenes more and avoid constant confrontation.
  • Better lifestyle involving less stress, after hours and weekend work.
  • Potential to work from home from month 4 onwards and early start options available.
  • Competitive salary and lucrative bonus structure.
  • Support to receive your real estate licence or maintain CPD if required.
  • Managed workloads that are  reasonable and achievable
  • Team building incentives.

The Employer

  • Boutique business with air-conditioned offices on the charming main street of Rozelle with multiple on street parking options within walking distance.
  • Pioneering firm have carved out a niche market for themselves and are years ahead of their competitors.
  • Currently require additional hands to capitalise on expected growth and unexplored opportunities.

Our Culture

  • Young at heart team of 5 who value diversity, hard work, common sense, bigger picture thinking and a unique sense of humour.
  • Distinct culture of getting the job done but having fun at the same time.
  • Team members are bold, brash, thick skinned and are looking for someone with compatibility.

You will fit in by

  • Having 2 + years of trust account management experience using recognised software packages.
  • Coming from a Real Estate, Property or Trust Accounting Software role with rental expertise.
  • Being someone who enjoys trust management, has a strong work ethic and eye for detail.
  • Not being afraid of putting in the extra effort required at mid/end of month peak periods.
  • Fitting into the team culture like a perfect rental tenant!

To apply, simply complete the online Seek application. We look forward to receiving your application!

Christmas Planning ~ Utilise your Trust Accounting Software to the Best of its Ability

Christmas Planning for a Guaranteed Restful Break…

Christmas break is just around the corner. And for those who have worked hard all year, the idea of kicking your heels up for at least a couple of weeks is highly anticipated. So how can you ensure your clients are well-informed and happy to be left to their own devices so you can indeed enjoy your holiday break?

Luckily, the answer is easier than you think! It just requires some clever Christmas Planning. Being well-organised and utilising your trust accounting software to the best of its ability. 

Let us show you how.

Our Top Tips to Ensure Your Christmas Break is Indeed a Break…

  1. Turn on SMS features

    The SMS feature within your trust accounting software is an efficient and simple way to communicate with your clients. SMS credits cost between 7-15c per message, dependant upon how many emails you send per month. It is a cost-effective way to inform your clients of your holiday movements and schedules. 

  2. Send emails via your trust accounting software

    Utilising your trust accounting software for emails keeps your client communications organised and easy to track. This is opposed to utilising several different email platforms which can create an organisational nightmare. 

  3. Use the bulk email mail merge option

    All communications need to be traceable. This is where the bulk mail merge option comes in handy as it allows you to track communications against individual contact records. So if needed down the track, you can quickly and easily pull up all client communications at the drop of a hat. 

  4. Utilise the Client Portal

    This is a must for those using the most recent cloud-based software systems. Agencies can now invite owners and tenants to their own ‘client portal’. They can allocate Property Managers as portal admins who can control what each client sees. We find agencies that implement the client portal save huge amounts of admin time. As the portal does it all for you! This means owners and tenants can view documents at a time and place that suits them. Whether that be at 6am Monday morning or 10pm on a Friday night. Which means less annoying phone calls to property managers during business hours. (That is a present within itself).

  5. Plan in advance

    We strongly advise to contact all your tradespeople well in advance before the Christmas break to confirm their availability over Christmas. Keep your list of on-call tradies who are on hand to attend to emergency repairs that pop up.

For more great tips, check out our previous blog on Putting your Trust Accounting Software to Work for the Holiday Season. This includes options of example emails to send to your clients dependent upon your Christmas operating hours and changes to normal payment schedules. As always, the more informed your clients are, the better. And a more peaceful and relaxing holiday break for you! 

~ 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. Trust End of Month Angels and get back to what you do best – growing your business.

Tips for Trust Accountants: How to Minimise Annoying Phone Calls

There are certain daily tasks that are guilty of draining important time from your day. Annoying phone calls for minor clarifications is one of them. Now we don’t want to discourage one on one communication with your owners, tenants and suppliers. That is not what we are about. Yet, we are about minimising the requirement for calls that could and should be self-explanatory. 

So, we have compiled a list of some of the most common, and yet most avoidable, causes for annoying phone calls. And trust us, we know. Now all our tips for owners, tenants and suppliers should be laid out upon commencement of the relationship. So every time you source a new supplier or bring in a new owner or tenant, ensure these points are 100% clear. It’ll save you mountains of time in the future.

Tips for Owners

It all comes down to communication your owners, the better you communicate with your owners, the better the relationship will be.

  • Show owners how to read a statement from your trust accounting software. Our previous blog outlines the top 10 trust accounting fails that will send your landlords packing which outlines the importance of getting the basics spot on. The more they understand, they less clarification they will need. 
  • Communicate with owners in advance when there are large invoices to pay such as special strata levies.
  • Notify owners in advance via bulk email or SMS if there are changes to the normal End of Month payments. This will undoubtedly stop the inundation of calls if owners are not properly informed. 
  • Communicate with owners if their tenants are in arrears prior to End of Month. If this is the case, owners may need to top up their mortgage account to rectify the difference. 
  • Encourage owners to meet face to face in the office if there are issues with their statement. Face to face communication is always best where possible. Due to the often complex nature of their statements, it is not something that can always be communicated well over email. And as we know, emails can be interpreted very differently from person to person. 

Tips for Tenants

If possible, try to find the time to explain the below items to new tenants at the signing of their new lease.

  • Explain how their rental payments work and the rental cycle. This includes when payments are due and the importance of having rent paid in advance. 
  • Explain to tenants the importance of not splitting rental payments. 
  • Provide tenants with a sample ledger at the commencement of the tenancy. Use the sample as an example of how to read a ledger. Once again, knowledge is key. 
  • Do not chase arrears prior to daily receipting. This is one big waste of time.
  • Enforce a  tenant payment system by utilising payment reference codes. This will help to avoid any potential incorrect receipting issues. And trust us when we say, this happens more than you’d care to imagine.

Tips for Suppliers

  • Advise suppliers when to expect payment from your agency. Once again a simple notice that can help avoidable and unnecessary phone calls.
  • Provide suppliers with an invoice deadline. This will ensure you are not bombarded with a magnitude of last minute invoices to be paid at the same time.
  • Notify suppliers via email or SMS if there are going to be changes to the payment cycle. Once again, the more knowledge they have, the better. 
  • Obtain supplier bank details prior to End of Month or Mid-Month payment runs. This will ensure the process is a seamless one with less running around on your side. 
  • Set up a specific ‘accounts’ email for invoices to be sent. This will ensure important supplier emails are not overlooked in the Property Manager’s inbox. Things are streamlined and orderly to minimise mistakes.

Pretty simple stuff right? It usually is. Get the basics right by keeping your owners, tenants and suppliers informed, and you are already on your way to less annoying phone calls.

How to Implement a Tenant Payment System

Earlier this month we spoke about the importance of setting up a tenant payment system and the key things to avoid to ensure the system runs smoothly. When it comes to tenant payment systems, apart from ensuring you have a system in place, the next key thing is to limit the payment options available.

We have previously discussed why agencies should not offer too many rental payment options. Having too many rental payment options can be both costly and time consuming to your agency with too many accounts to reconcile.  So the key is to set up an effective tenant payment system with set payment options.

MAKE THE MOST OF WHAT YOU’VE GOT

Using your Existing Software for Your Tenant Payment System

If your agency already uses the Macquarie DEFT system or another similar tenant reference card system then you are one of the lucky ones. Your tenant payment system should be operating like clockwork.

However, if you are a start-up agency or are looking for a low cost alternative, then the answer could be right under your nose already. The system ticks all the boxes. It is unique in that it doesn’t use phone numbers, property addresses or tenant names. (Remember our ‘What to Avoid’ tips…)

But the clincher – it is already part of your existing software.

Yes that’s right. It’s as simple as allocating a tenant record ID from your software and assigning it to the relevant tenant. Too simple right?

The Benefit of Sticking to the System

Your software record ID is a unique number to each and every tenant. It can only ever be issued just the once. So there are never any double-ups to reconcile. There are no receipting errors, which make the whole process simple and streamlined.

Sound too good to be true? Well, it just got even better…

Questions…

  • Is your record ID number recorded in the tenant bank reference section?
  • Do you have the ability to import your bank transactions through your software?

If you answered yes to both then your life just got a little easier again. If you answered yes then your software will do the heavy lifting for you. It will match the IDs for you and you’ll only be required to quickly cross reference to ensure a match.

Is Importing Transactions News to You?

If you are reading this thinking, ‘I didn’t know I could import transactions into my software!’ then it may be time to reassess your banking and software providers.

Only some banks allow you to export the file format which is read by your software. And vice-versa, not all software support all banking formats. Generally, common banking formats such as QIF and TXN and OFX are supported.

If you’d like to know more about how your bank and can to your software, firstly check out our blogs on when is the right time to switch trust accounting software and our 10 step guide to switching trust accounting software and how to switch banks and stay sane. Switching banks and software providers is a big move but one that can pay off in the end if you are unhappy with your current providers.

~ 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. Trust End of Month Angels and get back to what you do best – growing your business.

 

5 Reasons to Implement a Tenant Payment System

Ask any trust accountant and they will tell you that the bane of their life is when tenants transfer funds to the rental trust account with the reference “Rent”… Never before can one word cause so much pain. We surveyed our office and these were our top 5 funny rent references we have come across for rental payment references:

  • RENT FOR THIS WEEK AND LAST
  • JOHN RENT
  • HOUSE RENT
  • WATER INVOICE
  • RENT ARREARS

It really is hard to choose which is the pearler of the lot. So unless you are starved for some humour in your life, we strongly suggest implementing a rental payment system… stat.

Setting Up a Tenant Payment System

We cannot overemphasise the importance of setting a solid tenant rental payment reference system at the commencement of all new tenancies. Doing so will avoid a myriad of headaches including misallocation of rent. This is especially pertinent in between tenancies and to avoid tenants using the address as their reference. It is amazing how frequently outgoing tenant payments are misallocated to incoming tenants. And you can imagine the nightmare in fixing the problem in your trust accounting software.

What to Avoid

Names

Names are never a good idea. Too many tenants have the same name… aka JOHN. It is too easy to allocate to the wrong account. 

Phone Numbers

Tenants frequently change their phone numbers. This makes it difficult to track payments and there are much better systems to utilise.  

Our Top 5 Reasons to Change your System Now… If We Haven’t Convinced You Already… 

  1. Saving face

    It’s highly embarrassing when you have to ask a landlord to pay back funds to the trust. This is necessary if they have been incorrectly paid funds. Not just embarrassing but unprofessional as well.

  2. It’s messy

    Fixing ledgers can be messy. It can also complicate things further when having to explain the ledger at tribunal. Even more so when you need explain why a particular payment on a ledger wasn’t for that tenant. Reality is tribunal is complicated enough as it is without the added pressure of avoidable mistakes.

  3. It can be costly

    Allocating rent to a tenant and losing the management to another agent could mean the agency has to cough up the incorrectly allocated rent. Mistakes can very quickly add up.

  4. It’s time consuming

    It is a drain on your time trying to allocate funds to the correct ledger. A day’s worth of time and energy could be saved if it is set up correctly from the get-go.

  5. It’s a Headache

    This is a nice way of putting it. You’ll avoid having to deal with the unclaimed money process with Office of State Revenue and any explanations to your auditor.

So do yourself a favour and implement your new tenant rental payment system as your first task for the new year. You’ll save yourself money, time and your sanity.

~ 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.

When Landlords Change Bank Details

How to Ensure Your Money is going to the Right Place

Landlords changing bank details is a common occurrence in property management. When the correct systems and protocols are in place to advise tenants of the new details and timings, things can usually go without a hitch. Unfortunately, criminals are on the lookout for any new ways to make a quick buck.

The importance of ensuring your landlord’s new bank details are indeed correct and legitimate is vital. Otherwise, how can you ensure you are communicating with the right person? What’s to say you are not communicating with a criminal posing as your landlord? As far fetched as these things may seem, they do indeed happen. And they happen on a regular basis. 

Top Tips for Managing when Landlords Change Bank Details

  1. Always get the instruction in writing. In writing does no include text, ensure it is via email, letter or fax.
  2. Only communicate with the email from the original agency agreement. If any variation to the email address occurs, it is a red flag to investigate further. If the client has not communicated with you for a lengthy period of time, pick up the phone for a quick conversation to confirm the new details. In cases where they are overseas, organise a quick skype link up.
  3. Always store the bank details change of instruction in your trust accounting software for future reference and recording. That way it is at your fingertips when needed.
  4. Always confirm the instruction with the parties listed on the agency agreement. This means following up with a second confirmation of the change of details.
  5. Ask your clients to set their own password at the commencement of the management. If any changes are made, keep them on file for future reference. When any changes to details are required, your client will be required to quote the password. If any issues, explain to your clients that you are taking extra precautions to protect their most important asset. Most won’t be able to argue with that.

~ 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.

The Importance of Password Protection

Weak passwords are a hacker’s dream and everyone else’s nightmare. The reality is that the online world is far from safe. Hackers are on the constant look out for weak passwords and systems they can breach quickly and easily. Unfortunately, people are still failing to secure their online information and despite the warnings, online accounts are protected by common and feeble passwords. Password protection is vital to ensure yours, and your client’s, sensitive information remains secure.

The Australian Government has recently divulged the 25 most common passwords on the internet sourced from over five million passwords. Did yours make the list? It really is dumbfounding that the #1 password continues to be 123456. It is like an open invitation to a hacker to infiltrate your accounts.

So, apart from the chuckle of ‘hottie’ and ‘loveme’ making the list, what does this mean for you as an agent?

The Importance of a Secure Online Password

As well as everyone else in business and on the planet generally, it is important for agents to secure their trust accounts. And not only trust accounts but servers, your trust accounting software and all your other agency programs. We have too regularly seen agents with the password ‘password’ to access their accounts.The speed in which hackers guess passwords is frightening with software that can guess passwords at a rate of thousands per second. Pretty scary right? 

3 Steps to Improve your Online Security and Password Protection

  1. Change your weak passwords immediately!

    Especially if your password was on the top 25 list. We hope after reading the list you may have done this already.

  2. Install a password manager

    An online password manager stores all your passwords offline and can generate strong passwords to use on all your accounts. Being online you will always have access to them as well as knowing they are protected. We are a fan of lastpass which has a free option and paid subscription for employee access. It creates and stores passwords effortlessly and are on tap whenever you need them. It has been voted one of the top secure password managers of 2017. 

  3. Use two-factor authentication wherever possible

    If you are given an option for two factor authentication, be sure to take it. It may add a tiny amount of time to your day but will be well worth it!

~ 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.

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