Every real estate agency in Australia that holds client money knows the feeling in the weeks before an annual trust account audit. Even well-run offices get a knot in the stomach, because a single overlooked detail can turn a routine sign-off into an adverse finding, a please-explain from the regulator, or worse.
The good news is that most adverse findings come from a small, predictable set of issues. Here are the five we see most often, and what actually fixes them.
1. Dormant ledgers nobody has looked at
Money sitting in a client ledger for months or years with no movement is one of the first things an auditor checks. It might be an old bond top-up, a refund nobody claimed, or a landlord who sold up and was never fully paid out. On its own it is not fraud, but it signals weak oversight, and once auditors find one dormant ledger they start looking harder for others.
The fix is a standing monthly habit: run a report of ledgers with no activity in the last 60 to 90 days and clear the backlog before it becomes a pattern.
2. Negative or overdrawn ledgers
An overdrawn ledger, even by a few dollars, is treated as a reportable breach in every state. It usually happens when a payment goes out before the matching receipt has cleared, or when a fee is deducted twice. Auditors are not interested in intent here. A negative balance is a negative balance, and it needs a documented explanation and a corrective entry, not a quiet top-up from another ledger.
3. Reconciliations that are late, incomplete, or unsigned
A trial balance that matches your bank statement is only half the job. Auditors expect all twelve months of the audit period reconciled, reviewed, and signed off by the Licensee in Charge, with a date on each one. A missing signature or a skipped month is enough to trigger questions, even if the numbers are perfect.
4. Banking timeframes that slip
Most states require trust money to be banked within one or two business days of receipt. When rent is collected by cash, cheque, or a manual bank transfer outside your usual receipting flow, this is where timeframes tend to slip, especially around long weekends or staff leave. Auditors will sample transactions and check the date received against the date banked, so this is not a rule you can be casual about.
5. Adjustments with no audit trail
Corrections happen in every trust account. What auditors want to see is why. A ledger adjustment with no note explaining the reason, who approved it, and when, looks exactly the same on paper as an attempt to cover something up, even when it is entirely innocent. Every adjustment should carry a short, plain-English explanation at the time it is made, not reconstructed weeks later when the auditor asks.
The bigger picture for 2026
Trust account compliance is also getting a second layer this year. From 1 July 2026, real estate professionals fall under the federal AML/CTF Tranche 2 regime through AUSTRAC, which brings customer due diligence and suspicious matter reporting on top of your existing state-based trust obligations. Auditors are already asking about KYC records and cybersecurity protections around banking data, alongside the traditional checks above.
None of these five issues are complicated in isolation. What catches agencies out is volume: dozens of ledgers, hundreds of transactions a month, and a small team trying to keep on top of it all while also running open homes, chasing arrears, and answering the phone. That is exactly why a dedicated set of eyes on the trust account, checking these five things every single month rather than once a year, makes such a measurable difference to audit outcomes.
If you would like a second set of eyes on your trust account before your next audit lands, Trust Account Solutions works exclusively in this space and can run a health check against all five of these red flags well before your auditor does.