GIVING INSTRUCTIONS TRANSACTIONS

1. Step 1: Deal with EFT amount

EFT amount is received from your correspondent

Found on Debit side of given Statement of Account

Although the money is received – it is NOT your money – it belongs to your client

2. Step 2: Deal with the amount collected from Debtor (by Correspondent)

This is the money the debtor agreed to pay to your client (belongs to your client)

Found on Credit side of given Statement of Account

This is a non-cash/non-banking transaction – thus dealt with in TRUST

JOURANAL (because Trust Journal records VALUE movement in trust accounts,
NOT money movement)

The amount collected must be transferred from Correspondent’s trust ledger

account to client’s trust ledger account

FIRST – Record transaction in Trust Journal:

SECOND – Journal transactions must be recorded in Ledgers – What happens in

Journal stays (and is recorded) in EXACTLY the same way as in the Journal:
3. Step 3: Deal with costs

Consists of costs incurred by Correspondent to obtain payment from Debtor

Includes disbursements paid and fees plus VAT debited (charged)

This is a non-cash/non-banking transaction – thus dealt with in TRUST

JOURANAL (because Trust Journal records VALUE movement in trust accounts,
NOT money movement)

The costs must be transferred from Correspondent’s trust ledger account to client’s
trust ledger account

All amounts on DEBIT side of Statement of Account added (EXCLUDING EFT

AMOUNT)

Questions to be asked: Who is entitled to the costs/who did the work? – The
Correspondent

Who is liable to pay the costs – Your client

FIRST – Record transaction in Trust Journal:

SECOND – Journal transactions must be recorded in Ledgers – What happens in

Journal stays (and is recorded) in EXACTLY the same way as in the Journal:

4. Step 4: Deal with Fees plus VAT Correspondent shared (Allowance)

Consists of fees plus VAT thereon (allowance)

All amounts on CREDIT side of Statement of Account added (EXCLUDING

COLLECTED AMOUNT)

Non-banking/non-cash transaction – thus recorded in FEE Journal

FIRST – Record transaction in Fee Journal:

 SECOND – Journal transactions must be recorded in Ledgers – What happens in
Journal stays (and is recorded) in EXACTLY the same way as in the Journal:

If there is no VAT – simply leave the VAT part of the transaction out

5. Step 5: Transfer Fees and VAT (What is due to you) AND make payment

Determine how much is due to you: Client Account in Business:

Debit – Credit = Due to you

Determine if there is enough money Client Trust Account:

available to make the transfer: Credit – Debit = Available funds

FIRST – Record transaction in Transfer Journal:

SECOND – Journal transactions must be recorded in Ledgers – What happens in

Journal stays (and is recorded) in EXACTLY the same way as in the Journal:

THIRD – Make actual payment in ledgers:

6. Step 6: Pay remainder of funds back to client

Determine what is due to client: Client Account in Trust

Credit – Debit = Due to Client

Payment is made in ledgers:

7. Step 7: Statement of Account to Client

Must be drawn up like you (yourself/firm) did the work yourselves

Copy and paste Statement of Account as provided in question – REMOVING only

the allowances

Amount received from DEBTOR – New Balance