Introduction

 The cash side of property management is a specialist service:

• High volume transaction processing: rents, service charges and payments
• Spikes in volumes – quarterly or monthly – and the need to minimise the use of contract/temp staff
• Prompt segregation of service charges and tenant deposits
• Compliance with client/controlled money and AML regulations
• Credit control
• Managing rents received on leases in breach
• Service level agreements (SLA)
• Early accounting and payment to owners / clients
• The physical separation of clients’ money from firm’s money

Underlining all these demands: all the money belongs to other people – which demands precision, transparency, segregation of money flows; no discretion to write off differences, or to forgive debts or to share reconciliation differences between clients

Cash operation in property management has to be highly automated because the margins are thin but the cost of correction is high.

Cashfac’s Design

• The Core is the foundation level in operation and accounting
• Connectivity and synchronisation handles the interaction with the property management systems
• Principles set the foundation for speed and continuous precision

Core

1. Continuous external reconciliation

• Immediate alerts for missing bank transactions
• Full automatic reconciliation by 7am every business day
• Complete and accurate record of all bank accounts inside Cashfac

2. Continuous internal reconciliation

• Complete and accurate allocation of bank transactions to virtual / client accounts
• Automatic split / apportionment of rent and service charges
• Automatic transfer of service charges to service charge accounts
• Complete and accurate record of all client/virtual accounts inside Cashfac
• Daily interest accrual on fully reconciled accounts
• Multi bank – all transactions immediately normalised into Cashfac form and centrally presented.
• Sweeps for optimum interest performance.

3. Continuous reconciliation to rent books and receivables

• Automatic accounting feed to rent book / receivables of rents and service charges
• Uses the native customer referencing and transaction referencing
• Alerts for unrecognised rents

4. Accurate and prompt accounting to owner

• Reconciliation in 1,2,3 is propagated to accounting to owners / funds
• The allocation of money received to demands is rules-driven, applying strict matching criteria: isolating transactions that require attention; alerts for rents received for leases in breach (with optional automatic return to origin)

Connectivity and Synchronisation

Cashfac is non-invasive: it will operate alongside and in connection with one or more property management systems and ledgers without a change to those systems. If the user is operating more than one property management system (eg YARDI and TRAMPS) Cashfac will connect to all systems.

1. Connects to multiple property management, client and accounting systems
2. Uses the same client and tenant and property references as the main systems
3. Uses the same transaction references as the main systems
4. Enables a property manager’s branch/team organisational structure to be reflected in the operational cash management structure
5. Imports expected rents and service charges from the user’s systems and converts them into a forward banking form so that they can be matched as the funds come in.
6. Note that Cashfac can import for any date forward and it can take a continuous feed enabling the user to spread the workload and enabling the user to present an account view in cash form
7. On receipt of funds immediately exports to the user’s primary systems/ledgers/rent books an accounting record, one-for-one, telling the primary ledgers, rent books and receivables that the funds have been received, using the primary systems’ transaction and client/tenant references to enable an automatic match in the user’s main systems and cash books

Principles

Cashfac is fast and accurate. Reconciliation with the bank(s) takes place overnight including unmanned, secure digital connection with the banks, automatic matching of incoming money to rent expectations, isolation of unmatched funds and funds received on leases in breach, automatic double entry posting to cash books and client accounts; and automatic accounting entries generated and available for your primary systems, keeping your receivables, rent books, cash books and general ledger synchronised.

Cashfac is the earliest source of information on rents late and not received.

It is mandatory that the Cashfac system connects directly with the bank(s) that you work with. You should not consider the use of another system between the bank(s) and Cashfac. Where another system / ledger needs to have bank account records (payments and bank balances) switch on the Bank Echo feature in Cashfac. This is a complete and accurate record of all transactions in the bank accounts you operate. It is available before and during the business day.

The bank accounts used for collecting and managing rents are separate from the bank accounts used for running the business e.g. payroll. The service charge accounts are separate from the rent collection accounts with tenants deposit accounts separate. Cashfac calculates interest daily on balances that it reconciles and maintains a daily history of reconciled balances on all virtual accounts and all bank accounts. It maintains a daily history interest accrued on all account with the the interest and interest history recomputed on demand. Every balance in the historical accounting is reconciled including the bank balance of a day and the virtual account balances of that day.

Payments

Cashfac generates payments quickly and accurately with integrated controls including segregation of function and authorisation. Payments are automatically created for client settlement and service supplier payments. Cashfac’s payment processing is 4-phase: (1) origination which can be an invoice or a balance (2) forward dated payment (3) authorised and awaiting execution / settlement (4) cleared at the bank and reconciled. This process provides visibility, control and funding.

Where a separate treasury system is used to make the payments, the Cashfac system can interact to provide synchronicity and reconciliation.

If you are considering a limited application of Cashfac – service charge, tenant deposit, client money

You can choose to operate Cashfac in a restricted way for managing service charges and tenant deposits. You can do this as part of a progressive implementation strategy or as an ongoing option. To operate in this way the Cashfac system will connect with the bank(s) and send on to your primary systems the rent and fee transactions. Where tenants are paying composite amounts (rent and service charges in a single payment) Cashfac can separate the service charges out and pass the remaining (rent) to the property management systems.

 Unmanned operations (Cashfac on Azure or AWS)

Your Cashfac system is built to enable continuous usage and fast response / follow-up. The connection to the bank is automatic and unmanned. The reconciliation (any number of bank accounts) is automatic and unmanned, ensuring a complete and accurate record as the foundation of your operational cash management. These operations occur unmanned and overnight so that your operations can start from 8am (options for earlier start are available). Cashfac operates 24 hours during business days so that alerts are monitored around the clock.

• Your Cashfac system (the AORD component) automatically monitors the health of the connection to your bank(s) and the reconciliations. It transmits alerts for incomplete data transfers by the bank and out-of-rec positions on any of your bank accounts.
• Your Cashfac system will automatically resolve the position where possible by resetting and rerunning the bank data exchange and re-reconciling. Any required person-to-person follow up is prompt.
• Your Cashfac system is designed for continuous operation while your banks are experiencing operational difficulties in services and transmissions. The system will recover the full position as your bank resumes its full digital transmissions.

Remedial application of Cashfac for historical out-of-rec positions

For managers who are experiencing historical out-of-recs and considering the use of Cashfac, our staff are experienced at helping in problem isolation, resolution and forward clean processing. Isolation includes an account structure for ring fencing, transparency and monitoring of transaction level resolution.

We can adapt our accelerator for sandboxing groups of historical transactions for focused resolution.

Find Out More

For more information or to request a consultation with one of our experts on how Cashfac can help, please contact us.