Trust accounting requirements

Trustees are responsible for keeping certain trust records and copies of related documents in accordance with statutory requirements.  

These requirements are important to the integrity of the trust and ensure effective oversight, financial transparency and information sharing. 

The trust records that must be kept are outlined below:

Trust account ledger 

For each project trust and retention trust, a separate and individual account ledger must be kept. The trust account ledger must be capable of providing separate information for each beneficiary of the trust, including a complete record of transactions and the amounts held in the trust for each beneficiary.

The ledger must:

  • record all deposits and withdrawals affecting the trust in chronological date order within 5 business days of the transaction occurring – AND
  • include the required information about the transaction. 

Refer to the trust accounting guide for more information about keeping trust account ledger.

Record of deposits and withdrawals 

For each project trust and retention trust, a record of deposits and withdrawals must be kept.

A record of deposits and withdrawals is a document or computer file that lists or journals all transactions for the account (similar to a deposit book or cash receipts journal). 

The record of deposits and withdrawals must:

  • record all deposits and withdrawals affecting the trust in chronological date order within 5 business days of the transaction occurring – AND
  • include the required information about the transaction. 

Refer to the trust accounting guide for more information about keeping record of deposits and withdrawals.

Trial balance and bank reconciliation

Trustees must balance their trust accounts and prepare certain statements for each month, including:

  • a trust account ledger trial balance statement – this reconciles the beneficial interests and money held in the account for the month
  • bank reconciliation for the trust account – this reconciles the financial institution statement against the trustee’s record of deposits and withdrawals as well as  the record of deposits and withdrawals against the trust account ledger (trial balance statement).

Both statements must be prepared within 15 business days after the end of each month.

Keeping other records 

The following records must be kept for a project or retention trust:

  • copy of each contract for which the trust is required
  • all payment claims given by or to the trustee (including supporting statements)
  • all payment schedules given by or to the trustee (including all supporting information provided) 
  • documents relating to any variations or amendments to contracts
  • all financial institution statements for the trust account
  • all bank reconciliations (including information used for those reconciliations)
  • all trust account ledger trial balance statements (including information used for statements)
  • records of any changes (and reasons for those changes) to:
    • trust account ledger
    • trust account ledger trial balance statement
    • record of all deposits and withdrawals
    • bank reconciliation
    • notices given about deposits and withdrawals 
    • copies of account review reports 
    • records for completion of retention trust training
    • documents explaining any abbreviations or acronyms used in the above records.

All trust records must:

  • record transactions in Australian dollars
  • explain all transactions in English
  • record transactions in chronological order
  • record all deposits or withdrawals within 5 business days of the deposit/withdrawal
  • be retained for at least 7 years
  • be accurate and enable convenient and proper audit of the trust account transactions.

Refer to the trust accounting guide for more information about keeping trust account ledger.

Computer systems may be used to keep trust records, but must meet certain requirements, including BOTH of the following:

  • not being capable of deleting any part or all of the trust account ledger or record of deposits and withdrawals
  • being capable of producing separate reports for particular trust accounts and/or particular periods and/or particular beneficiaries.

While computerised information systems can make it easier to comply with the trust accounting and record keeping requirements, some general accounting and spreadsheet software may not meet these requirements. 

It is the trustee’s responsibility to ensure the system they use is kept up-to-date and that all aspects of their record keeping comply with the legislation.