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12 October, 2019 | Fiona Taylor
The reason for this is due to a change in the banking system whereby banks are able to cancel ordinary direct credit payments up to 24 hours after they have been made. Consequently, our trust account rules now require us to hold funds in Smith and Partners’ trust account for two working days before we pay the funds to our client.
An example of this is where we have a settlement of the sale on a Friday and need the balance of deposit from the agent in time for funds to be paid out to clients on settlement. In this case, we need the agent to either pay the funds to us by close of business on the Wednesday, or pay us by using the ‘same day cleared payment’ system.
Same day cleared payment means the funds are forwarded as cleared funds and the payment cannot be reversed. Usually, you can make a same day cleared payment by clicking a certain button on your online banking system.
This requirement to receive funds in cleared format affects all payments we receive that need to be paid out — including funds we receive from clients to settle their purchases.
It does sometimes seem that the more automated and easier the banking system gets, the tighter the rules become that govern us all!
2 November, 2011 | Fiona Taylor