Trust accounts are a unique way to keep your assets and earnings safe. Basically, an agent will handle and manage them for you until such time that you will need them again. Think of it as a way of asking a friend to look after your valuables, and the only time that they will give it back is when you will finally use them. Of course, the conditions in a trust account are a bit different. The grantor has to surrender the assets to the third party or the trustee first before they may even be given to you, the beneficiary, at the right time. In any case, the principle is basically similar.
For the main reason of keeping tabs on the records and checking for any discrepancies, you may want your trust account audited by a professional. However, not everyone is familiar with the ins and outs of the process. In such a case, you must first consider the following pointers before sending in the auditor. Not only will they ensure that the process goes smoothly, but they will also enable you to understand the procedure as a whole.
1. Keep a Receipt of All Your Processes
Receipts are a great way to have a paper trail of your own. Most of the details that the auditing process will touch on are included in them. If you do not save them, you may be overwhelmed by the amount of backtracking that you’ll have to do just to find all the necessary evidence to debunk any error in the computations. Receipts will support your claim if the total by the end doesn’t add up. The auditing process is not simple; that is why you should prepare all the necessary paperwork to ensure that your auditors will not have a hard time keeping tabs on the numbers.
2. Utilise Accounting Software to Help With the Process
You do not have to worry about this if your auditor already has all the necessary tools to accomplish the task efficiently; however, you may still need to coordinate this with them. Accounting software will definitely make it easier for everyone, not to mention quicker and accurate.
Most accounting software today even has the functionality of reconciling the numbers between the account and the other transactions involved in that account so that you and the other parties will have a clear view of what went on with your trust account.
3. Create a Digital Footprint of Your Transactions
This is somewhat similar to the first pointer, but you will have a digital copy of all the numbers at your disposal instead of keeping physical receipts. Your auditors will not have a hard time trying to track your account transactions, and neither will they encounter any miscalculations as the digital trail is enough to piece together a “story” of what is currently happening with your trust account. Don’t worry about your privacy, as the only ones who will access your digital trail would be your auditor, your grantor, and your trustee. Think of this method as your security camera, a sure way of monitoring how and when the assets were handed to you by the trustee, going as far as to include the exact amount.
There are a couple of things to consider when auditing your trust account. While it may be tempting to jump ahead to the process itself, a few preparations are set in place to ensure that you and the auditor will not have a hard time analysing the numbers. Keeping tabs on the process and the transactions will not only show your grantor that the assets they’ve entrusted with the trustee were delivered on time, but it will also give them an idea of how you were able to use them once you’ve received them. Prepare for the audit and see the appropriate results.
If you would like to get an accurate financial audit of your trust account, look no further than our expertise here at SMB Accounting. We specialise in individual tax returns, small business accounting, SMSF audits, among other things. Contact us today for more information about our accounting services.