Client money accounting made easy with PayProp
26 October 2023 2366 Views
A client account is essential to your lettings business, but the rules and regulations you need to follow to keep this vital bank account open can trip some agents up. However, ignorance is no excuse.
Rules and consequences
Most crucially, as a letting agent you need to know when a transaction must be reported to HMRC for anti-money laundering checks (AML), and of course that you need client money protection (CMP) insurance.
And yet many in the industry are blissfully ignorant or negligent about ensuring their own client money compliance. As a result, estate and letting agencies across the UK were fined millions for AML breaches in 2022 – and thousands more recently by local trading standards authorities for missing CMP policies.
Some in the industry claim current regulations are causing some banks to refuse to open new pooled client accounts for letting agents. And the rules might get even tougher, with HM Treasury currently consulting on tighter proposed AML regulations.
A simple solution
But there is a simple solution, one that gives you total oversight over your client money, lets you account for every penny, provides clear visibility of the amounts that need to be reported for AML supervision, tracks and permanently records every action taken on your account, and even simplifies your CMP policy renewal process. That solution is PayProp.
PayProp is a bank-integrated client accounting platform that gives you unparalleled insight into your client monies. It reconciles your incoming payments on all properties to the right tenant and property and lets you pay out rent to the landlord and collect your commission on the day the tenant pays it. Whether you have 5 or 5,000 properties under management, you can reconcile and pay out your entire portfolio in a couple of clicks. This saves you time you can dedicate to growing your business, and many PayProp clients do – our client base grows on average 21% every year*!
All of the money and the data recording its source, destination and movement is secured by PayProp with encrypted bank-grade security. Our platform is backed up across multiple locations, with a new server always ready to take its place in case of failure.
Our easy-to-read reports allow you to interrogate your data, highlighting any tenant arrears, your average rent, commission payments and more. PayProp’s detailed management reports further allow you to see long-term trends in your business and benchmark your rents against the local competition or national rental data.
Great benefits for Propertymark members
Additional client money confidence is available to Propertymark members, who can grant the organisation’s compliance team read-only access to their PayProp account, allowing them to monitor your agency’s client money environment for compliance. This not only helps you feel more confident in your client money account, but also means your agency no longer needs to undertake costly and time-consuming annual accountant’s reports to retain your Propertymark membership. The insight Propertymark’s compliance team gains will also speed up your CMP renewal process, as they will have most of the information they need to offer you a renewal without needing to check with your bookkeeper or accountant.
While all of these measures benefit your business with assured compliance, safety and security, it also benefits your landlords. Confidence that their money is safe is key during a cost-of-living crisis that could affect a tenant's ability to pay the rent. With PayProp, landlords also have access to an exclusive Owner app that allows them to track every penny of rent from the moment your agency receives it, offering them reassurance and transparency that the money is safe in your client account. PayProp’s automated statements further cut down on the number of landlord enquiries thanks to clear and concise reporting of money flows to or from their properties.
Peace of mind and agency growth
PayProp’s complete client money package offers you and your team peace of mind, while cutting down on account queries from your landlords.
And the results speak for themselves – not only do PayProp-powered agencies grow without adding to their overheads, but the incredible support they get from PayProp has seen PayProp win Best in Sector – Payment Services five times in a row at the prestigious ESTAS Awards.
To see what you're missing out on, book a free consultation with one of our client money specialists.
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