Managing Escrow Accounts Doesn’t Have to be a Juggling Act
Businesses that require multiple accounts can find the traditional banking model maddening. The process of opening and closing escrow accounts can bog down operations and leave more room for error. Whether you need to manage escrow accounts for real estate development, security deposits for rental property or attorney trusts, you may find yourself wishing you had a better, more automated process that would save time and give you more control, flexibility and visibility.
If your business manages multiple accounts, acts as an escrow agent holding funds or is required to track balances and activity separately without co-mingling funds, we encourage you to consider the following when looking for the right banking partner:
- Personal assistance. Are you left on your own, with a how-to manual and 1-800 voice activated phone system or will a professional work with you to determine the best way to meet your needs, walk you through how to use the solution and assist you personally when something goes wrong?
- Flexibility of set-up. Is it one-size-fits-all, or can the solution be tailored to your purpose, be that general escrow needs, real estate use, attorney trusts, 1031 exchanges or any other purpose that benefits from independent account management? Did the bank purchase an off-the-shelf third-party solution, or do they have control over its design to make improvements and adapt to client and industry needs?
- Speed of account setup and ability to open your accounts for each of your clients or projects without involving your bank. A traditional master bank account should only take 24-48 hours to set up. After that, you should have the ability to set up subaccounts within minutes.
- Variety of controls, manual and automated options. Ask for a demonstration of the user experience. Inquire about how much control you’ll have for allocating funds, splitting interest, generating statements and setting up or backdating transfers. Which functions have the option to be automated? Can wires be direct posted?
- Integration with online banking. Is the platform connected to the online banking account you use to manage the rest of your business accounts?
- Ease of accounting and distribution of tax forms. What are the capabilities for downloading or exporting statements and reports for auditing and accounting purposes? Do you have the choice to have 1099s sent automatically to each escrow account owner?
These discussion points should guide you to the right choice. Find a trusted partner who gives you the autonomy to manage your accounts coupled with timely personal service anytime you need it.
