Client accounting: outsource it, ringfence it, or staff it?

Client money is the part of a lettings business that can end it. Rent, deposits and float move through a regulated structure — client money protection membership, a designated client account, the professional body’s rules on handling and reporting — and every conversation about outsourcing any of it should start from that structure rather than from the workload. Propertymark publishes its own guidance on the options open to member agents, and the shape of it is worth restating plainly, because the market tends to blur three genuinely different arrangements into one word.

The three structures

• Outsource it whole. A specialist client accounting provider operates the function end to end, often holding money in its own protected arrangements. A mature corner of the market with long-established firms in it; the trade knows the model as CASP, client accounting service provider. What you are buying is their regulatory infrastructure as much as their labour.
• Ringfence it. The regulated arrangements — the account, the scheme membership, the accountability — stay with the agency, and a specialist runs the process inside them. Closer to home, but still a supplier inside the most sensitive room in the building.
• Staff it. The agency keeps the function and the people. The traditional answer, and the one under the most pressure, because a good accounts person is one of the hardest hires in lettings and the work grows with every tenancy whether or not the fee income does.

Where we fit, and where we do not

We are not a client accounting service provider, and this note is not a quiet pitch to become yours. Money never touches this firm: no client account here, no handling, no custody, ever. The structure we serve is the third one — the staffed function — by putting the administrative capacity behind your own arrangements. Reconciliation preparation, invoice matching, statement production, arrears correspondence at the polite stage, the daily grind that a qualified accounts person should be reviewing rather than typing. Your account, your scheme, your sign-off; our hours.

The honest comparison, then, is not us against the specialists. It is whether your accounts function needs replacing or needs relieving. If the regulated structure itself is the problem — nobody senior enough to own it, protection lapsing, an audit looming — a specialist provider is the answer and we will say so in the first conversation. If the structure is sound and the people inside it are drowning, capacity is the answer, and capacity is what we sell.

Whichever structure you choose, one test applies to every provider in this market, including us: ask where the money sits on the day the provider fails. If the answer involves their bank account rather than yours, price that risk before you price the fee. We wrote about the 2021 collapse that taught the sector this lesson in a separate note, and it is the first thing we would want to know as a buyer.

Ejas Deane is a partner of the firm. He answers enquiries himself.