Are you new to the Real Estate industry and looking for the right trust accounting software or have you ever questioned if the software you’re currently running is the best software for you?

This month’s blog posts are all about technology and how it relates to running the trust account. Having the right technology in place is imperative. The functionality must be user friendly but most of all, compliant.

There are many options available on the market for trust accounting, but which one should you choose? We have put together a few questions that you need to consider when purchasing new software or if you’re thinking about switching to a different product.

1. Does the software have the ability to enter and display Unique Identifying Numbers for each Trust Account & print this number across all Trust account reports (effective 1st January 2015)?

a) Good software products have already introduced this function in order to meet the new Regulations 2014. If your software company hasn’t then ask them when they will be implementing this feature. The deadline is 30th June 2015.

2. Is the software compliant with the PSBA 2002 & PSBA Regulations 2014?

a) We’ve read about software companies claiming that they are “Fair Trading Approved” but the reality is that NSW Fair Trading will never put their name to a product. Be careful of any company that makes these claims and ask them to back their claims in writing. Ask to view the various trust accounting reports and if you’re unsure then ask your auditor to have a look at them for you to see if they are truly compliant.

3. User friendliness – how simple is the software to use?

a) Ask for a demonstration. Is it obvious where you look for a property, owner or tenant? How simple is it to enter a receipt, print a ledger or look at owner balances?

4. Does the software allow any ledger accounts to be placed into negative?

a) No trust accounting package may allow records show a negative balance or put the trust into overdraft. 40 Penalty units may apply if an account is overdrawn.

5. Does the software allow local or off-site backup? If it is cloud based, how secure is the information being stored?

a) This is crucial in meeting PSBA Regulations 2014 Part 4, 22 (10)a.

6.  Does the software allow records to be altered, amended or deleted?

a) Breach of which is 40 penalty units. This immediately excludes software such as MYOB, Quickbooks, Quicken or Xero. These are NOT trust accounting software/programs and should never be used for this purpose. However they may be used for administering the businesses general account including payroll tax, wages, BAS & GST etc.

7. Split funds between multiple payees?

a) For example splitting funds between more than 1 owner. This is quite common in accounting for Property Management, where there are owners wanting funds deposited into multiple accounts.

8. Does the software create electronic funds transfer (EFT) and Bpay files?

a)  Used for disbursing multiple owners with minimal effort (your bank must also support these types of files known as ABA files).

b) Can the software pay invoices with Bpay thus reducing the amount of cheques that your office is required to send? Having this function results in maximum efficiency – there is no lining up at the post office to pay bills or posting statements with cheques. When you run large rent rolls this makes a huge difference to the amount of time spent running your end of month. You would also need to speak with your bank to see if they are able to support this type of payment file. Also known as an ABA file but in CSV (Comma Separated Values) format.

9. Does the system have electronic file storage capability?

a) Being able to electronically scan documents against the property minimises the use for paper and promotes efficiency throughout the department.

b) State of the art software would also allow you to scan invoices for payment and attach these invoices to monthly Landlord statements. The software has inbuilt barcoding technology which can automatically read the barcode and create payment.

10. What system controls are in place? Can you set user restrictions?

a) Not all staff in your office should have access to the trust records nor should they have access to client’s banking information or have the ability to change the bank details or settings in any way. A good trust accounting system will have the ability to produce an ‘exceptions report’ which will detail any record that has been manually changed.

Additionally, if you’re operating a sale trust then you will need to also consider how efficient the software is in managing the sale process. Which includes:

–       Receipting initial deposit

–       Recording sales and commission information

–       Recording investment account interest earned (Interest Bearing Deposit)

  •   Not all trust accounting software will allow you to manage IBD accounts

–       Recording advertising funds received and paid

–       What does the Vendor settlement statement looks like? Ask to see an example.

So how much should good software cost? The cost of running good software varies on several factors:

How large is your rent roll? How many trust accounts do you operate? What areas of Real Estate your office involves Sales, Rentals, Commercial or Strata?

You should never have to pay for a module that you don’t use. A good software provider should grant the ability to only pay for what you need so you aren’t paying for sales access if you’re only running a property management business.

So the best advice is to shop around and as the old saying goes ‘cheapest isn’t always the best’.  Because the most expensive software isn’t always the best option either. Therefore, look for something in the middle of the range and ask lots of questions. If it doesn’t meet the above requirements then keep shopping.

Finally, what trust accounting software do you run in your office and what do you love or hate about the product you run? Have you found software that offers value for money and meets our requirements? If so we would love to hear from you.

~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislation and the requirements of running a successful Real Estate office because she practiced Real Estate herself for 18 years. Don’t trust just anyone with your trust accounting, trust End of Month Angels and get back to what you do best – growing your business.