Trust Account Rules Property Managers Need to Take Seriously

Trust accounting is one of those areas where "close enough" isn't close enough.
Property managers are handling money that belongs to other people.
That creates responsibilities around:

• Segregation
  
• Reconciliation
  
• Documentation
  
• Deposits
  
• Disbursements
  
• Reporting
  

The exact legal requirements vary by jurisdiction, so property managers should always verify applicable rules with the relevant state or local authority.
But the operational principles are universal.
Know What Money You Are HoldingA property management company should be able to answer:
Whose money is this?
That sounds obvious.
But with multiple owners, tenants, security deposits and operating accounts, accounting records can become complicated quickly.
Reconciliation Is a ControlReconciliation isn't simply about producing a report.
It is a control mechanism.
It helps identify:

• Missing transactions
  
• Duplicate entries
  
• Incorrect transfers
  
• Unexplained balances
  
• Coding problems
  

If something doesn't reconcile, don't simply force the numbers to match.
Find out why.
Avoid ComminglingProperty managers must understand the applicable rules governing client and company funds in the jurisdictions where they operate.
Different states have different requirements.
That means generic internet advice is not enough.
Policies should be checked against current official guidance and reviewed with qualified professionals when necessary.
Build a Repeatable ProcessA strong trust-account process should define:

• Who records transactions
  
• Who reconciles
  
• Who reviews reconciliations
  
• How exceptions are handled
  
• How documentation is retained
  
• How owner balances are reviewed
  

Acrebook provides property management accounting support, including trust account reconciliation and financial record organization.
Phone: +1 (732) 242-4135
Email: info@acrebook