THE LETTING PARTNERSHIP
Client Accounting – what are your options?
31 January 2024 867 Views
The benefits for letting agents to outsource their client accounting is well documented, however with an increasing number of options available, the problem has become that of ‘choice overload’!
When it comes to client accounting solutions there has never been a better time to outsource, but choosing the right outsourcing provider is crucial to continued business success, so where do you start?
The decision can be broken down into two key areas:
1. Evaluating Your Needs
Client Accounting “solutions” come in many shapes and sizes, so what is the best fit for you?
Do you want to pass on ALL the administrative burden of client accounting, or do you just need a ringfenced client money bank account?
Do you need software?
Is the outsourcing solution going to involve migration or is it seamless?
Banking only solutions
Some companies offer stand-alone electronic money accounts. If you simply require a banking solution then this could be the option for you, however we strongly recommend you check with your CMP provider that the company meets the scheme’s compliance criteria before committing.
You may alternatively decide to choose a banking platform provider who can offer a client account as an add-on to your existing software. Be aware though, that if your lettings software is already in place it's advisable to consult with the provider regarding the practical aspects of integration, as it could involve duplication of work and/or unnecessary upheaval - and you’re still the one pressing the buttons!
There are also banking platform providers where you would be required to switch to using their client account. If your lettings software and client account are already in place, migration will involve unnecessary upheaval and disruption to tenants. Ask the provider whether an existing client account can be retained and consider the duplication of work across two software platforms.
Client accounting service-based approach
For a completely hands-free solution why not consider The Letting Partnership, which is a specialist Client Accounting Service Provider (CASP) powered by people not PropTech. They can provide a service-based approach offering maximum flexibility and support. With a dedicated account manager accessing your system, they work on your existing software using your existing Client Account to pay your landlords. This removes the worry of holiday cover and staff turnover.
If you are having trouble opening a Client Account they can do that for you too.
This solution provides support and expertise whilst keeping business interruption to a minimum.
2. Is Your Outsourcing Solution Transparent?
Having identified a solution which aligns with your vision and gives you the desired benefit, how can you be sure the reputation of your business is safe in the hands of your chosen provider?
Due diligence is crucial. Your reputation – indeed perhaps the very existence of your business – rests on making an informed decision. There are several key considerations:
Do you have full visibility of your client money at all times – day or night – or is it moved elsewhere
Who’s liable if something goes wrong?
Does the Client Account information provided meet your CMP scheme’s rules?
Does your provider have adequate Professional Indemnity insurance cover?
Does your provider have Client Money Protection insurance in their own right?
For owner/managed businesses the benefits of outsourcing to an experienced and client friendly company far outweigh the expense and burden of conducting the process in house.
If you choose wisely, outsourcing your client accounting could be one of the best business decisions you ever make!
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