End of Month is called end of month for a reason \u2026.to pay everyone at the end of the month. As a trust account trainer the most common question asked is \u201cwhen do I do end of month?\u201d. Some people are adamant that it should be done on the last day of the month as \u201cthat is the end of month\u201d \u2026others think it should be done on the first day of the month to include all of the transactions for the month prior; even if it is a weekend and others think that it needs to be done on the first business day of the month as the banks have then sent through all payments and you have definitely receipted everything.<\/p>\n
Who is Right?<\/p>\n
Answer \u2013 EVERYONE!<\/p>\n
It is not about when you \u201cperform\u201d end of month but when you reconcile. Two very different things. Section 17 from the Agents Financial Administration Regulation 2014 states below that you must reconcile within 5 days of end of month not actually performing it.
\nAgents Financial Administration Regulation 2014
\n17 Trust account cash book reconciliation
\n(1) A principal agent must, within 5 business days after the end of
\neach month\u2014
\n(a) reconcile the trust account cash book balance as at the
\nend of the month with the trust account ledger balances
\nthat show\u2014
\n(i) each trust account creditor\u2019s name; and
\n(ii) the amount held on behalf of the creditor as at the end of the month; and
\n(b) reconcile the financial institution\u2019s statement balance for
\nthe principal agent\u2019s trust account as at the end of the
\nmonth with the trust account cash book balance as at the
\nend of the month.
\n(2) The principal agent must keep each reconciliation completed
\nunder this section in the principal agent\u2019s records.
\nBest practice is as follows:
\n\u2022 Reconcile on the 1st to include all the payments for the month using the last day of the month Bank Balance.
\n\u2022 Perform end of month in your trust accounting software
\n\u2022 Pay out your owners
\n\u2022 Deduct your commission
\n\u2022 Roll the month<\/p>\n
In short, if you perform end of month on the 1st of the month and BALANCE you are abiding by the regulation and will not be fined. If you perform it earlier just remember to come back and balance by the 5th of the following month.
\nDO NOT FORGET TO PRINT\/EXPORT THESE REPORTS FOR YOUR AUDITOR.
\nI have also spoken to a dear auditor friend of mine and asked the most common ways that she is finding fraudulent activity in trust accounts and they are as follows
\n\u2022 Cash bonds \u2013 This is STILL happening.
\n\u2022 Fake suppliers being set up (yes this is very common) think about it \u2013 your boyfriend is setup as a plumber and you EFT his bank account funds for \u201cfake\u201d jobs? How long would it take your licensee to track this down. I also work with a lot of offices on this matter and as a trust account specialist this is the VERY first thing I investigate.<\/p>\n
I could go on and on about the correct procedure for trust accounting as I am very passionate about it, and it still baffles me how many agents\/onsite managers are being fined and in far worse cases jailed.<\/p>\n
If you would like a pre trust account audit done to ensure you are doing things correctly, please don\u2019t hesitate to contact us at Real Strategix<\/p>\n","protected":false},"excerpt":{"rendered":"
End of Month is called end of month for a reason \u2026.to pay everyone at the end of the month. As a trust account trainer the most common question asked is \u201cwhen do I do end of month?\u201d. Some people are adamant that it should be done on the last day of the month as \u201cthat is the end of month\u201d \u2026others think it should be done on the first day of the month to include all of the transactions for the month prior; even if it is a weekend and others think that it needs to be done on the first business day ofRead More →<\/a><\/p>\n","protected":false},"author":1100,"featured_media":346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_mbp_gutenberg_autopost":false,"footnotes":""},"categories":[3,6],"tags":[],"class_list":["entry","post","publish","author-laurenrealstrategix-com-au","post-345","format-standard","has-post-thumbnail","category-accounting-and-finance","category-landlords-tenants-renting-and-management"],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1100"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=345"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/345\/revisions"}],"predecessor-version":[{"id":347,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/345\/revisions\/347"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/346"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}