We have a list of wonderful clients who are sales only agencies. No rent rolls. On top of that, some only have a handful of transactions a year. So with this in mind, we often get asked 2 questions:
- ‘Do I really need trust accounting software?’
- ‘How often do I need to reconcile?’
The answer to question #1 is simple. Yes.
The answer to #2 is a little less straightforward.
Let’s start with going into detail with #1.
Trust Accounting Software for Sales Only Agencies
An easy way to think of it, is if you are holding money on behalf of a client, you require trust accounting software to record the transactions.
For those with no rent rolls, it is common practice and completely acceptable for solicitors to deal with the deposits. For those with a trust, the use of MYOB, XERO or an excel spreadsheet is not appropriate to record your transactions. Why? The use of these accounting software packages and spreadsheets breach the regulatory requirements of computer systems control. Regulations state that agents must not use a package whereby transactions can be altered, amended, deleted or put a clients ledger into negative balance. The three examples above unfortunately tick all these boxes.
Trust Accounting Software that Suits your Needs
The solution for our sales only agencies is to find a trust accounting software solution that suits your business model. Do your research. Find a package that contains all the functions you need. Whether you handle a handful to hundreds of transactions a year.
Most cloud packages start at around $100 per month for basic access. This level of access will be more than sufficient to record a small number of sales transactions throughout the year.
How Often do I Reconcile my Sales Only Account?
Back to question #2. How often you reconcile your trust account will depend on your state legislation. For example, in NSW, it is required to reconcile 21 days after EOM. Regardless of your state legislation, we always recommend to reconcile daily for best practice. That way, any issues can be dealt with on the spot and whilst the transaction is front of mind.
If you don’t have the volume to support daily reconciliations, we recommend to reconcile once a week. Getting into this regular weekly habit will demonstrate good business practice for your auditor or Fair Trading if ever required.
So there you have it. Our top 2 questions for sales only agencies, and we bet the answers were simpler than you thought!
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.