End-of-Month Trust Account Reconciliation – Why It Matters
End-of-Month Trust Account Reconciliation
A monthly trust account reconciliation must reflect the true closing balance on the final day of the month, in accordance with the Agents Financial Administration Regulation 2014. It must be completed within 5 business days and include the bank statement balance and reconciled ledger balances.
Why It Matters
As the end of the month approaches, reconciling your trust account isn’t just a compliance task—it’s a critical control that protects your business and your clients.
On the last day of each month, your trust account should be carefully reconciled to ensure:
✔ The bank closing balance matches your trust ledger
✔ All receipts and payments are recorded accurately
✔ Any outstanding items (e.g. unpresented cheques or deposits) are identified
✔ Your records are complete and audit-ready
Importantly, the legislation is clear. Under the Agents Financial Administration Regulation 2014:
Section 17(1) requires that a principal agent must, within 5 business days after the end of each month, reconcile the trust account cash book balance with the trust ledger balances.
Section 18(1)(a) requires the reconciliation to include the balance as at the end of the month shown on the financial institution’s statement.
This means the reconciliation must reflect the true closing balance at the end of the last day of the month—not the last business day, and not a cut-off based on a time such as 4:00pm. It is the final transaction recorded on the last calendar day of the month that determines the closing position.
A properly completed monthly reconciliation provides confidence that client funds are being managed correctly and helps identify errors early—before they become issues.
We understand that this process happens at the busiest time of the month. Our role is to support you with clear, practical guidance so you can stay compliant within the required 5 business day timeframe—without unnecessary stress.
If you’re unsure whether your reconciliations meet requirements, we’re here to help.
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