Receipting, Reconciling, Disbursing: A Plain English Guide to Trust Accounting

If you work in property management, you know trust accounting is not just another admin task. It is one of those parts of the job where you have to get every detail right, every single time. The work itself is not glamorous, but it is essential.

The three steps at the heart of it all are receipting, reconciling, and disbursing. Miss one, or get it wrong, and you can end up with stressed owners, confused tenants, and even a compliance breach.

This guide breaks each step down in plain English, with tips you can actually use in your day-to-day work.

Receipting: Recording money in

Receipting is the process of recording any money that comes into the trust account. That might be rent payments from tenants, bond money, or reimbursements for maintenance costs.

Every payment must be receipted in your trust accounting system and allocated to the correct property and owner. Accuracy here is non-negotiable. If a payment is entered against the wrong property, it creates extra work later and can affect disbursements.

Imagine this (or maybe this has happened to you) - You discover a $1,200 rent payment sitting “unallocated” in the trust account. It turned out the tenant had put the wrong reference on the transfer.

As you can see, without careful receipting, that payment might have stayed in limbo until the next reconciliation, causing unnecessary stress for both tenant and landlord.

Reconciling: Checking the books match the bank

Reconciling is about making sure your trust account records match your actual bank statement. This is where you confirm that every cent is accounted for.

Most property management regulations require reconciliations at least monthly, but doing them weekly or even daily can save headaches. If there is a discrepancy, it needs to be resolved immediately. The sooner you catch an error, the easier it is to fix.

Think of reconciliation as a safety net. It not only helps you find mistakes, it also protects you during audits by showing that you have been diligent in tracking client funds.

Disbursing: Paying money out

Disbursing is when you pay funds from the trust account to the people entitled to them. This usually includes sending rent to landlords, paying suppliers for approved maintenance work, and refunding bonds when tenants move out.

Disbursements are often scheduled, for example mid-month and end-of-month, and they must be done on time. A late payment to an owner can quickly damage your relationship, even if the delay was unintentional.

To make disbursing easier, many property managers prepare payment runs in advance and double-check all amounts before releasing funds.

How these three steps fit together

Receipting, reconciling, and disbursing are not separate tasks. They form a cycle. Money comes in, is recorded, checked against the bank, and then paid out to the right people. Miss one step or get it wrong and the whole process is affected.

By keeping each stage accurate and up to date, you not only comply with trust accounting rules but also protect your business and your reputation.

Practical tips for property managers

• Receipt promptly to avoid forgotten or unallocated funds. ‍
• Reconcile often so errors are caught early. ‍
• Plan disbursements to keep owners happy and cash flow predictable. ‍
• Use property management software that supports trust accounting and automates parts of the process. “Ahem...hello Reapit PM!” ‍
• Stay organised with clear records in case of an audit.

The bottom line

Trust accounting does not have to be a mystery. Receipting, reconciling, and disbursing are the core actions that keep your trust account balanced and compliant. If you approach them with care, you will spend less time fixing problems and more time focusing on the parts of property management you enjoy.

And if you have ever spent an afternoon hunting for a missing $50 in a reconciliation, you already know how much easier life is when these three steps are done right from the start.