Mention the words ‘End of Month’ in any Real Estate office and you’re bound to receive a few cringes.
It really doesn’t have to be that scary. I have sat through over 1000 ‘End of Months’. So I have put together a reference on the minor things we commonly overlook in preparation for this event.
It’s the small things that count. If you’re organised then you can pretty much guarantee that each month’s end will be a winning success. Sure, I can’t prevent your server from crashing (which always seems to happen on that day of the month). But I can assist you with a few things that hopefully will form a bit of a checklist in your office.
There is not one overall overarching list that I could write for every office. Let’s face it – we are all different and use different methods and technology. That’s what makes us unique from our competitors. What I’ve done is break this up into tasks to complete at crucial times on the lead up to end of month so that you’re not left tearing your hair out.
Oh and I’ve also added an Essential Shopping list. You’d be amazed how many people forget items 1-6…
Essential End of Month Shopping List:
- Paper
- Folders
- Ink/Toner
- Staples
- Stamps
- Envelopes
- Chocolate/Coffee/Tea (Whatever gets you through)
- Panadol (Trust me on this)
Daily:
Photocopy/Scan your invoices – Your software may not have the capability to scan and electronically file your invoices to send to your clients so if that’s the case then my best suggestion is to keep on top of the photocopying daily and don’t let it build up. Keep the copies in an expander file in alphabetical order, ready to attach to your Landlords statements.
Backup – Section 22 (10) of the PSBA Regulations 2014 tells us that backup must be done at least once per month. In my opinion, this simply isn’t enough. You must backup your data daily. It’s so important. Imagine if your office burnt down, or your server crashed – how would the Landlords get paid? Always ensure that your back files are able to be taken offsite too.
Reconciliation – The Regulations state that we must reconcile within 21 days after the End of Month but most Trust Accounting software available today make it so easy to reconcile on a daily basis. Don’t create more stress for yourself by leaving to the last day or on the morning of End of Month to attempt to balance the account because it is a genuine nightmare. If you don’t balance then you can’t pay your Landlords.
Receipting – Section 26 of the PSBA Regulations 2014 says we must receipt daily. Despite this, I see many people receipt whenever they feel like it. Why wouldn’t you do it daily? It makes arrears management that much easier and you can always give a confident response to a Landlord who contacts you with an account balance enquiry.
Fortnight Before:
Make sure you have enough cheques and if not then you may need to contact your bank to order more.
One Week Before:
Prepare your Landlord newsletter (if you have one) or plan what you’re going to write as a statement message across all of your owners statements. Most trust software will allow you to write a global statement message to all of your clients. A good one to continually use, from a risk management perspective is a reminder to the clients about the importance of having Landlords Protection insurance. This one was my favourite when running the Landlord statements.
Three Days Prior:
Collate the bond forms and reconcile the bond account. Make sure all forms are signed and that they’re all there ready for when you make the disbursement, chase up any forms that may be missing or incorrectly placed into the property file.
Check your unidentified deposit account and see if any of the money has been identified. Receipt money to the tenants where possible and don’t allow the account to build up if possible. This is extremely important . This money belongs to your clients and do not carry it over into a new month where possible. I commonly witness agents receiving fines for not doing this.
Check your holdover account (sometimes known as suspense ledger) and try and clear this as much as possible, some of this money may also belong to your clients. If so then you should disburse the funds held and do not allow the funds to accumulate to a point where it’s out of control. Clear this account regularly…and that doesn’t mean put the funds in your pocket. It means investigate where the funds need to go and make the appropriate journals to correctly allocate the money to the right people.
The Day Prior:
Do a quick stocktake and make sure you have enough supplies.
Perform a statement run preview to make sure that there are no anomalies (such as funds withheld, double paid invoices, overcharged commissions/fees etc. This is where you may also pick up any clients that haven’t provided you with bank account details yet. Contact them, obtain their details and enter them into your software so you can minimise your cheque run.
Have a look at the unpaid invoices report and see what you can process. Perhaps you can even disburse your creditors the day before as well so that End of Month isn’t so time consuming.
On the Day:
Backup Again!! Can’t stress this enough. 40% of calls that End of Month Angels receive are because someone forgot to backup and their server dies in the middle of the statement run. They lose all data. Not fun if this has ever happened to you.
Receipt any last minute rents that have appeared on the bank statement and do NOT release any funds to an owner where the tenant has provided you with a cheque on the morning of End of Month. If the cheque bounces then you’ll need to ask the owner for the money back again. Never a fun phone call to make.
Reconcile one last time to make sure your software balance and your physical bank statement balance match up. This is what your auditor will be looking to see when they audit your records in the next audit period.
Perform your statement run in your trust accounting software.
Back up Again!! A before and after end of month backup could quite literally save your behind. Any change in your information and you will need to run the process again if you accidentally erase data.
Upload your payment files through your banking product, keep the copies of the payment list, delete the file after you have completed the upload to make sure you don’t send it to the bank twice and overdraw your trust account.
Collate your statements and send to your clients with the appropriate attachments. If you’re lucky enough to have your clients on email statements then you can skip to the next stage.
Breathe a sigh of relief…it’s over! (Until next month anyway)
Are you doing something innovative in your office to help prepare for End of Month? I would love to hear your thoughts. Post your comments below.
~Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. She knows the legislation, and the requirements of running a successful Real Estate Office. She practiced Real Estate herself for 15 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.