We are all aware of the common safety risks associated with the running of an office. However, we don’t often consider the risks associated with trust management.
From a recruitment perspective, trust accountant roles are quite rare with trust accountants staying in their roles for longer than an average Property Manager.
Whilst most offices will have one trust accountant, quite a lot of offices have no one manning the trust accounting desk and this task is largely delegated to an existing Property Management team member. This is, in some cases, a different skill set and the team member allocated to carrying out the trust accounting may not completely understand the requirements under trust accounting legislation and it’s guidelines.
It is imperative that whomever you choose to carry out those trust functions in your office understands the requirements and the potential risks associated with trust management.
Legislation
With high fines associated in the trust account legislation space, consider if your trust accountant is up to date and knowledgeable on the current legislation.
What is the best method for them to stay up to date and are they notifying anyone if something is amiss? Each state’s trust account legislation differs slightly and up to date versions will be available on your governing body’s website.
Processes
Trust accountants are usually (not always) a stickler for the process! They will learn the process and follow it month after month. What if there is an easier or quicker way?
Most trust accounting software has a wizard to process owner payments for mid month and end of month or they will certainly provide a checklist to follow.
If your software has these features and you are not using them, it is possible that could your process could be missing steps or be taking longer than needed.
End of month should be a smooth process using the software as it is intended for. Reviewing processes regularly will ensure that the most efficient processes are being looked at for your business.
Diversification/cross training
What happens when your trust accountant goes on holidays or is sick? Can they only take holidays after end of month? Is there anyone else in the office that can process these tasks? If not, this is a big risk to your company. While we are not suggesting training all your staff on all the trust accounting task, it may be useful to have a couple of team members know different tasks in the event the trust accountant is away sick or on leave so that they can step in and process those vital tasks if needed.
Reporting
Trust accounts are required by law to be audited once a year. Do you know the reports you are to provide to the auditor and the requirements surrounding them? Are you being given the correct reports to view. In the day to day processing of your trust account do you know if the account is reconciled and what the adjustments are there for? By not knowing this information, are you putting your agency at risk? Could you request a few daily reports to ensure that the trust account is running smoothly during the month and just not at the end.
At Real+ Outsourced we have considered all of the above risks when formulating our processes. Why not give us a call (02 8355 4999) to see how we manage these risks for our clients.
