Ask any trust accountant and they will tell you that the bane of their life is when tenants transfer funds to the rental trust account with the reference “Rent”… Never before can one word cause so much pain. We surveyed our office and these were our top 5 funny rent references we have come across for rental payment references:

  • RENT FOR THIS WEEK AND LAST
  • JOHN RENT
  • HOUSE RENT
  • WATER INVOICE
  • RENT ARREARS

It really is hard to choose which is the pearler of the lot. So unless you are starved for some humour in your life, we strongly suggest implementing a rental payment system… stat.

Setting Up a Tenant Payment System

We cannot overemphasise the importance of setting a solid tenant rental payment reference system at the commencement of all new tenancies. Doing so will avoid a myriad of headaches including misallocation of rent. This is especially pertinent in between tenancies and to avoid tenants using the address as their reference. It is amazing how frequently outgoing tenant payments are misallocated to incoming tenants. And you can imagine the nightmare in fixing the problem in your trust accounting software.

What to Avoid

Names

Names are never a good idea. Too many tenants have the same name… aka JOHN. It is too easy to allocate to the wrong account. 

Phone Numbers

Tenants frequently change their phone numbers. This makes it difficult to track payments and there are much better systems to utilise.  

Our Top 5 Reasons to Change your System Now… If We Haven’t Convinced You Already… 

  1. Saving face

    It’s highly embarrassing when you have to ask a landlord to pay back funds to the trust. This is necessary if they have been incorrectly paid funds. Not just embarrassing but unprofessional as well.

  2. It’s messy

    Fixing ledgers can be messy. It can also complicate things further when having to explain the ledger at tribunal. Even more so when you need explain why a particular payment on a ledger wasn’t for that tenant. Reality is tribunal is complicated enough as it is without the added pressure of avoidable mistakes.

  3. It can be costly

    Allocating rent to a tenant and losing the management to another agent could mean the agency has to cough up the incorrectly allocated rent. Mistakes can very quickly add up.

  4. It’s time consuming

    It is a drain on your time trying to allocate funds to the correct ledger. A day’s worth of time and energy could be saved if it is set up correctly from the get-go.

  5. It’s a Headache

    This is a nice way of putting it. You’ll avoid having to deal with the unclaimed money process with Office of State Revenue and any explanations to your auditor.

So do yourself a favour and implement your new tenant rental payment system as your first task for the new year. You’ll save yourself money, time and your sanity.

~ Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 19 years industry experience. 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.