Effective client funds tracking is crucial for maintaining financial transparency and operational efficiency across various industries like real estate professionals, dealers in precious stones, metals and products, lawyers, conveyancers, accountants, trust and company service providers in Australia. While specific software solutions like TrustSoft can provide structured tools, the core principles of accurate and compliant settlement tracking and Anti Money Laundering and Counter Terrorism Finance (AML/CTF) remain consistent. By adhering to a systematic approach, organisations can significantly enhance their settlement processes, minimise errors, and ensure adherence to relevant Australian financial regulations.
Here’s a step-by-step guide to optimising your client funds tracking procedures:
Define Your Organisational Needs
Before implementing any new system or refining existing ones, it’s essential to conduct a thorough review of your current client onboarding and settlement processes. Identify key workflows, pinpoint areas of inefficiency, and assess where errors frequently occur. Understanding your unique fund tracking requirements—whether for conveyancing, property management, debt collection, or other sectors—is the foundational step towards improving accuracy and workflow. This initial assessment should inform the selection and configuration of any trust accounting and AML/CTF solution. Very important to understand the needs relevant to your industry here. The regulatory body, the state and federal laws differ from industry to industry.
Develop a Tailored Strategy
Based on your identified needs, formulate a comprehensive strategy that aligns with your operational goals and compliance obligations around trust accounting and AML/CTF rules. This involves selecting appropriate tools (which may include specialized trust accounting and AML/CTF software like TrustSoft), defining clear tracking client’s funds and associated ML/TF/PF risk assessment and policies, and planning for seamless integration with existing financial and operational systems. The strategy should also consider reporting requirements, internal controls, and audit preparedness specific to your industry.
Implement TrustSoft and Securely Migrate Data
Execute the setup of your chosen trust accounting system (TrustSoft) with a focus on minimising disruption to daily operations. A critical aspect of this phase is data migration. Some historical and ongoing clients and financial data must be transferred securely and accurately to the new system to prevent loss, inconsistencies, or data breaches. Robust data validation processes should be in place to ensure integrity post-migration. The AML/CTF Act establishes the following Customer Due Diligence (CDD) obligations: initial CDD, ongoing CDD, enhanced CDD and simplified CDD.
Establish Robust Internal Controls and Training
Beyond just setting up the system, robust internal controls are vital. This includes defining user roles and access permissions, implementing dual authorisation for critical transactions, and establishing clear protocols for data entry and verification. Comprehensive training for all staff involved in transactions recording and settlement tracking is essential to ensure they understand the system, relevant legal obligations, and best practices for accurate record-keeping. Your AML/CTF program must be documented and approved by a senior manager of your business. It must be kept up to date to reflect significant changes to your business and relevant ML/TF/PF risk products released by AUSTRAC. It must also be independently evaluated at least once every 3 years.
Ensure Required Reporting
Reporting certain transactions and suspicious activities maintains the integrity of the financial system and aids law enforcement in staying compliant and combating crime. Apart from maintaining client ledger, periodic statements, three-way cashbook, trial balance based on beneficiaries, automated receipts and remittance advises to meet trust related legislations, the types of reports you may need to submit to AUSTRAC are:
- Suspicious matter reports (SMR): When you suspect on reasonable grounds that a person is not who they claim to be or that a matter is linked to criminal activity or proceeds of crime.
- Threshold transaction reports (TTR): For individual physical currency transactions valued at A$10,000 or higher.
- International value transfer service reports (IVTS): For all international transfers of value transactions.
- Cross border movement reports: Submit when carrying physical currency or bearer negotiable instruments payable to bearer valued at A$10,000 or higher into or out of Australia.
- Annual compliance reports: Submit an annual report summarising how you have met your AML/CTF obligations in the previous year.
These AML/CTF changes come into effect on 1 July 2026, but trust accounting compliance requirements are already in place. By systematically implementing these steps and maintaining a strong focus on accuracy and regulatory adherence, businesses can achieve a seamless and reliable clients fund management and associated process, significantly reduce operational risks and enhance financial clarity.