5 trust accounting mistakes that could cost you – and how to avoid them

Trust accounting might not be the flashiest part of property management – but it’s one of the most important.

Get it wrong, and the consequences can be serious: failed audits, financial penalties, or even a suspended licence.

But here’s the good news: most trust accounting mistakes are avoidable with the right system, habits, and tools in place.

In this article, we’ll walk through the most common errors property managers make and how to steer clear of them.

What are the most common trust accounting mistakes in property management?

1. Mixing agency or personal funds with trust funds

It seems obvious – but it still happens. Trust accounts must be used exclusively for client funds, and any crossover (intentional or not) is a breach of legislation.

Avoid it by:

• Keeping strict separation of operating and trust accounts
• Using software that flags unallocated or incorrect deposits

2. Missing reconciliation deadlines

Most states require trust accounts to be reconciled monthly – but ideally, it should happen daily or weekly. Leaving it too long increases the risk of errors, fraud, or oversight.

Avoid it by:

• Scheduling automated reconciliations in your property management software
• Reviewing reports regularly to catch discrepancies early

3. Incorrect disbursements or duplicate payments

Disbursing to the wrong landlord, paying the wrong amount, or duplicating payments can lead to panic, complaints, and audit issues – even if it’s an honest mistake.

Avoid it by:

• Double-checking payment approvals
• Using automation tools that reduce human error
• Setting up standard disbursement workflows

4. Lack of audit trails or missing documentation

If you’re ever audited, you’ll need a clear record of every trust transaction – with dates, amounts, authorisations, and supporting notes. If it’s not documented, it doesn’t exist.

Avoid it by:

• Keeping everything digital – from receipts to notes
• Using a platform like Console Cloud that automatically tracks and stores this data

5. Not keeping up with compliance requirements

Trust legislation and requirements vary across Australia – and they change over time. If you’re not across the latest updates in your state, you could be operating out of bounds without even realising it.

Avoid it by:

• Staying informed through industry bodies and updates
• Regularly reviewing internal procedures
• Using software built to support compliance

What tools help with trust account compliance?

The right tech can take a huge amount of pressure off your team. With Console Cloud’s trust accounting tools, you can:

• Automate daily, weekly, or monthly reconciliations
• Store full audit trails automatically
• Set up approved workflows to prevent disbursement errors
• Generate audit-ready reports in just a few clicks

Want to know more about trust accounts? Read this: Understanding Trust Accounts.

FAQs

What is a trust accounting error?

A trust accounting error can include misallocating funds, late reconciliations, disbursing to the wrong account, or failing to document transactions.

What happens if my trust account fails an audit?

Consequences can include warnings, fines, loss of licence, or legal action – depending on the severity and your state’s legislation.

How often should I reconcile my trust account?

Most states require monthly reconciliations, but many agencies reconcile weekly or even daily to catch issues early.

Trust starts with your trust account

The fastest way to build confidence with clients (and sleep easier at night) is to know your trust accounting is rock solid.

The right systems won’t just help you avoid mistakes – they’ll help you prove your professionalism during EOFY and audits.

Ready to simplify trust accounting and reduce risk? See how Console Cloud supports compliance, automation, and peace of mind. Book a quick chat here (or simply enter your details below).

Also handling sales deposits? Console Sales offers dedicated sales trust workflows to keep your compliance sharp across every part of the business.