Posts Tagged ‘Janine Kennedy’

Fee Auditing

With the downturn of the Real Estate market we look for ways to tighten the purse strings and cut costs with some agents looking at software and staff options.

But have we considered fees we should be receiving?

While all our fees have been set up in our trust system at point of receiving the Management Agency Agreement, are they ever checked again? What should we be checking for?

As we are moving away from paper/hardcopy files to soft files this is an opportune time while scanning in MAAs to check the fee set up in your trust account software.

Where to start? Pull out or open a Managing Agency Agreement?

Work your way down checking that the fees are correct in your trust account system.

GST

Ensure you know if the fees included on the MAA are GST inclusive or exclusive and if it is shown as GST inclusive or exclusive in your trust system.

Fees

Check all fees listed on the MAA are entered correctly in your trust account system. If there are some missing check if they need to be entered somewhere or just in the notes for when they are charged.

Automation

Is there a way to automate any of the fees you are currently charging manually? Can you set up recurring invoices or is there a new field for they fee that wasn’t there when the management was entered.

What to do if the fees are incorrect

This will need to be a decision made with your licensee and managing director. Should you back charge the fee or notify the owner of the incorrect charge from this month and amend.

Be sure to include any changes of fees on your forecasted budget for the financial year.

If you would like any more information on what to check and where to check for missing fees, feel free to call Real+ on 02 8355 4999.

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Risk Management

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.

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