Yes, we’re still in audit season!

This means we’re seeing a lot of agents making consistent receipting errors. In some cases, they are receiving breaches for non-compliance. Each year we cover some of the most common receipting mistakes we see.

So let’s chat about our top 5 receipting errors of 2020 and more importantly, how to avoid them.

  1. Receipting for last day of the month

    Receipts must be entered into the correct period. This look at this example. Entries on the bank statement are dated 31st of the month. The 31st was a Sunday.

    Solution: date them as the 31st, not the 1st of the new month.

  2. Not setting up tenants upon approval

    We are consistently seeing agents failing to set up their tenants and allocate tenant reference codes upon application approval.

    Solution:     Set tenants and their codes up immediately. Doing this simple step saves time and energy when it comes to receipting directly to the right tenant. Rather than allocating the funds to unidentified, or in worst cases, in adjustments and then forgetting to allocate.

  3. No bond setup

    Again, agents are falling into a common trap of not setting up the bond payment immediately.

    Solution:     When you’re setting up the tenant upon application approval, update the software with how the bond is being paid and add the bond code. Is it being paid to the bond authority directly? Or is the agency going to receive the bond in the trust? Misallocation of funds can be easily avoided with this simple step.

  4. Identification of bond referees

    Delaying identification of bond referees is another common, yet easily avoidable error.

    Solution:     Enter bond references so refunds can be easily identified and receipted to the correct ledger in the software immediately once they are received in the trust.

  5. Not receipting live transactions until they’re cleared

    We particularly see this occur with, CBA, ANZ & WBC. Live or Osko transactions are shown at the top of the transaction history from your bank. They are dated today’s date, not yesterday.

    Solution:     Best practice is to receipt the previous day’s banking, not live transactions as they are not currently cleared funds. It also leads to reconciliation errors and confusion on the next day’s banking when you come to decipher what’s already been entered from the previous day versus new transactions.

The best way to avoid receipting errors is to export the bank statement from your trust into a QIF format. You can then import through your cloud software. It assists to ensure correct dates and amounts. However, always verify that you’re only importing the previous day’s transactions to avoid confusion.

If you would like some assistance with streamlining your receipting practices or cleaning up your adjustments, contact the experts at End of Month Angels and ask about our support packages.

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