It’s time to break your bad Trust Accounting habits

We all have those habits in our lives that are hard to break. You know the ones.

Going to bed too late.

Bingeing on Netflix.

Committing to regular exercise.

We all have them.

Then there is one that continues to top the list of all Trust Accountants.

Not reconciling daily.

2022 is the year to change!

Failure to conduct a daily reconciliation continues to top the list of Trust Accounting mistakes. It’s like that sweet tooth you just can’t kick.

But the good news is – it’s a much easier fix than a pesky sweet tooth! It just comes down to making a new habit.

So if you are going to make one change to your business this year, this is it.

Reconcile daily.

Let’s walk you through why.

Why you should reconcile your Trust Account every day

The time period in which you must reconcile your account varies throughout Australia. In NSW our regulations state within 21 days and in QLD it’s even shorter, just 5 days to reconcile your account following end of month.

Whatever the time frame is that’s applicable to your state, once a month isn’t frequent enough.

‘Why so?’ you ask….

  1. It’s stressful

    Leaving anything to the last minute is stressful! Leaving reconciliation to the very last minute means a lot of additional stress you could quite simply avoid altogether. Why make your job any harder than it has to be?

  2. A molehill can quickly become a mountain

    A mistake that could be quickly and easily corrected can just as quickly become a nightmare. Reconciling daily allows you to see any glaring errors right as they happen. Can you remember every detail from an entry 30 days ago? Neither can we. Reconciling daily, everything is fresh in your mind. You won’t be needing to look back through cashbooks for doubled-up entries or overpayments.

  3. Your auditor will thank you for it

    Even the harshest of auditors will appreciate seeing a reconciled account to the previous day. Who wouldn’t?! This will work very much in your favour if you are ever randomly audited by Fair Trading. Trust us on that one.

  4. One-off disbursements

    If you ever need to conduct a one-off disbursement, you can rest assured knowing you are paying your creditors, vendors and landlords exactly what they need to be paid. Not a cent more or less. This avoids any uncomfortable explanations as to why you overpaid a landlord at the end of the month.

  5. Theft and fraud easily identified

    By reconciling daily, you’ll pick up on any dirty business straight away. If there is any theft or fraud happening, you’ll see it right under your nose as soon as it occurs. Reconciling daily allows Licensees to see what is happening within the Trust Account at an immediate glance giving overall better transparency and minimising risk.

Make implementing daily reconciliations your must-do for 2022 and see watch the impact it will have on your end of month. You’ll thank us later!

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