Keeping things simple is not easy, especially in the document-driven domain of business financial management. This is especially true when professionals require escrow accounts. Law offices, real estate firms and other professional services responsible for escrow funds must perform complex paperwork, record-keeping and other time-consuming processes driving up staff time and costs.
These costs are driving more professional firms to shift from in-house escrow management to a low-cost option available from some financial services providers . Escrow Management is one of the fastest-growing items on the roster of business services offered by our bank and the reason is clear: savings through streamlining.
The escrow fiduciary responsibilities of many professional firms — particularly law offices — have traditionally necessitated large volumes of time for escrow record keeping, tax reporting and paperwork especially with estate law accounts. There may be complex interest calculations, 1099 reports and other bookkeeping responsibilities. These are costly, non-productive overhead hours which cut directly into the firm’s bottom line.
If your bank provides Escrow Management services, it can be a zero-cost, single-source solution to streamline the process and eliminate the need for cumbersome paperwork and costs.
Typically, clients are provided with one Master Account for deposits and a separate Escrow Disbursement sub-accounts for check writing. The bank does all the paperwork and record-keeping, provides comprehensive monthly reports and prepares and mails all 1099 forms.
This bank-provided escrow solution also takes care of IOLTA (Interest on Lawyer Trust Accounts) and 1031 Exchange requirements.
Your time-savings are compounded by the fact that only an initial appointment at the bank is required to open the Master Account; all subsequent sub-accounts can be managed telephonically or online.
Time is money. Visits by attorneys or staffers to the bank eat up a lot of potentially billable hours on the low-value tasks of setting up and when managing multiple accounts. With an Escrow Management banking relationship, after the initial deposits are set up in the Master Account just a phone call or e-mail activates fund transfers and attorneys can write a disbursement check right from their desk.
Bank-provided Escrow Management should also offer 24/7 phone and email service so transactions can be completed promptly…ideally on the same business day prior to three in the afternoon. Additional financial security is provided because each bank sub-account is FDIC-insured up to $250,000.
Here in the Lehigh Valley, bank-provided Escrow Management is now finding favor well beyond the legal community. It may be a fit for any organization or business that has a lot of sub-account activity like municipalities and title companies. Ask your business banker if they offer Escrow Management services and get all the facts on their cost/service structure. It may provide a streamlined solution that will drive operating efficiency…and more profit to your bottom line.