Setting Up Your Scheme's Bank Accounts and Financial Records From Scratch

Most self-managed schemes don't set their financial records up — they inherit them, usually as a shoebox of statements and a spreadsheet only the last treasurer understood. If you're starting genuinely from scratch — a brand-new scheme, or one leaving a strata manager with nothing but a closing balance — you have a rare advantage: you get to build it properly the first time. Do that, and every AGM, audit, and handover for the next decade becomes a non-event. Get it wrong, and you'll spend years untangling money that was never clearly separated. This guide covers the three things that matter most on day one — the bank accounts, the two funds, and the records the law says you must keep — and how to wire them together so the whole thing stays auditable.

First principle: the money is the scheme's, not yours

Every dollar of levies belongs to the owners corporation (called a body corporate, strata company or owners corporation depending on your state), not to the treasurer and not to any individual owner. That single principle drives every decision below:

• Accounts are held in the scheme's name, using its ABN — never in a committee member's personal name, and never mingled with anyone's private money.
• The treasurer is a signatory, not the owner of the funds. Signatories change at every AGM; the account and the money don't.
• Everything is traceable. Any owner is entitled to inspect the records. If you can't show where a dollar came from and where it went, the records aren't doing their job.

Get this right and most compliance follows naturally. Get it wrong — a personal account "just to get started", cash payments with no receipts — and you've created a problem that a future committee will have to clean up, sometimes with a forensic accountant.

Step 1: Get the scheme's ABN and identity sorted

Before a bank will open an account in the scheme's name, it needs the scheme to exist as an entity it can identify.

• ABN. An owners corporation is generally eligible for its own Australian Business Number. Apply through the ABR — it's free, and the bank will usually ask for it. Use the scheme's registered name (the strata/community plan name), not a trading name.
• GST. Most small schemes fall under the $75,000 turnover threshold and don't need to register for GST. Larger schemes that cross it must register — and once registered, levies generally include GST. If you're near the threshold, get advice before deciding; it changes how you invoice levies.
• TFN. A scheme can hold a Tax File Number and may need to lodge a tax return if it earns assessable income (for example, interest on reserves or income from non-owners). Interest earned on the scheme's own funds is treated differently from commercial income — a good starting point is your state strata body's guidance, and an accountant if there's any outside income at all.

Step 2: Open the bank account(s) in the scheme's name

Here's the question everyone asks first: one account or two?

The safe, common answer for a small scheme is two accounts — one for the administrative fund and one for the capital works fund — because it makes the legally required separation of the two funds physically obvious and impossible to accidentally breach. It's the setup that survives a handover with the least explaining.

You can run a single account with the two funds tracked as separate ledgers in your bookkeeping, and some schemes do — but it demands disciplined bookkeeping to prove the capital works money was never spent on admin costs, and it's easier to get wrong. If in doubt, open two.

When you open the account(s):

• Name: the full registered name of the owners corporation / body corporate, not an individual.
• Signatories: set up at least two signatories, and require two-to-authorise for payments above a threshold you set. This is the single most effective fraud control a small scheme has, and it costs nothing.
• Statements: electronic statements to an address the committee controls (a scheme mailbox), not one treasurer's personal inbox — so access doesn't vanish when the treasurer does.
• Interest: put the capital works fund somewhere it earns interest; that money sits for years and shouldn't sit idle.

South Australia, Tasmania, the ACT and the Northern Territory each require scheme money to be held in the scheme's name and the funds to be kept and accounted for separately, with their own rules on which funds are mandatory. Confirm the specifics under the Act that applies to your scheme before you open anything.

Step 3: Set up the two funds — and never let them touch

Every state requires (or, for smaller schemes, allows) two distinct funds, and the reason they must stay separate is that they're for different things:

• Administrative fund — day-to-day running costs: insurance, electricity for common areas, minor repairs, audit and admin fees. Money in, money out, roughly balanced each year.
• Capital works / sinking / reserve fund — the long-term kitty for major, infrequent expenditure: roof replacement, repainting, structural repairs. It builds up over years and is spent in lumps.

The rule that trips up new committees: you cannot spend capital works money on admin costs, or vice versa, without following the process to transfer between them. Keeping them in separate bank accounts (Step 2) makes an accidental breach almost impossible. If you run one account, your bookkeeping must show two clearly separate fund balances at all times.

For the full picture of what each fund can legally cover — and how to move money between them when you genuinely need to — see Admin fund vs capital works fund: what can you legally spend from each?.

Step 4: Build the records you're legally required to keep

Bank accounts hold the money; the records prove what happened to it. Most states require a self-managed scheme to keep, and make available to owners, some version of the following:

• The strata roll / register of owners — current owners, their lot entitlements, and contact details. This is what you levy against and notify from.
• A levy (contributions) register — what was levied on each lot, when it was due, what's been paid, and what's outstanding. This is the backbone of the whole finance function.
• Receipts for every payment received — issued in sequence, so every dollar in is accounted for.
• Records of every payment made — invoices and the authorisation behind each payment out.
• Financial statements — a statement of the two funds' income, expenditure and balances, prepared for each AGM.
• Minutes and the minute book — including every financial decision (levies struck, budgets adopted, major spends approved).
• Insurance records — policy, sum insured, and the valuation behind it.

Retention: most jurisdictions require financial and scheme records to be kept for a set number of years (commonly around seven). Keep everything; storage is cheap and a missing record at handover is expensive.

The practical test for whether your records are good enough: could a new treasurer who's never seen the scheme reconstruct its financial position from the records alone, without ringing you? If yes, you're done. If the answer depends on knowledge that lives only in your head, the records aren't finished.

Step 5: Reconcile from the very first month

Reconciliation — matching your records against the bank statement so the two agree — is the habit that keeps everything honest. Done monthly from day one, it takes ten minutes and catches errors while they're small. Left until the AGM, it becomes a forensic exercise.

Each month (or at least each quarter for a very quiet scheme):

1. Pull the bank statement(s).
2. Match every deposit to a levy payment (against the right lot) or other income.
3. Match every withdrawal to an approved, invoiced expense in the correct fund.
4. Confirm the closing balance on the statement equals the balance in your records.
5. Note anything unmatched and chase it immediately.

If it reconciles every month, the AGM financial statements write themselves and an audit is a formality.

A from-scratch setup checklist

• [ ] Scheme's ABN obtained (and GST position confirmed)
• [ ] Bank account(s) opened in the scheme's name, using its ABN
• [ ] At least two signatories set; two-to-authorise above a threshold
• [ ] Statements delivered to a committee-controlled address
• [ ] Administrative and capital works funds established and separated
• [ ] Strata roll / register of owners created and current
• [ ] Levy register set up, with each lot's entitlements and due dates
• [ ] Receipting and payment-authorisation process agreed
• [ ] Opening balances recorded and reconciled to the first statement
• [ ] A monthly reconciliation date in the calendar

Common mistakes

1. Starting with a personal or "temporary" account

There is no such thing as a temporary account for scheme money. Every dollar that passes through a personal account is a dollar you'll have to explain later. Open the account in the scheme's name first, before you collect a single levy.

2. One signatory who controls everything

A sole signatory with sole access is both a fraud risk and a single point of failure — as anyone who's dealt with a treasurer who resigned holding the only login will tell you. Two signatories and committee-controlled statements from day one.

3. Blurring the two funds

Paying an insurance premium out of the capital works account because it "had the cash" is a breach of the fund separation every state requires — even if you meant to fix it later. Keep them physically separate and the temptation disappears.

4. Records that live in one person's head (or laptop)

A spreadsheet only the treasurer understands, on a laptop only they can open, is not a scheme record — it's a liability. Records must be reconstructable by someone new, and accessible to the committee, not just to you.

5. Leaving reconciliation until the AGM

Twelve months of unreconciled transactions is the single most common reason a self-managed scheme's books are a mess. Reconcile monthly and it never becomes a project.

Frequently asked questions

Do we need one bank account or two?

You need the two funds kept separate; you can do that with two accounts (simplest and safest) or one account with disciplined separate ledgers. For a small self-managed scheme, two accounts is the setup that's hardest to get wrong and easiest to hand over.

Can we just use the treasurer's personal account to get started?

No. Scheme money must be held in the scheme's name. A personal account mingles the owners' money with an individual's, breaches the record-keeping rules, and creates a mess to unwind. Open the account properly before collecting levies.

Do we need to register for GST?

Only if the scheme's turnover crosses the $75,000 threshold. Most small schemes are under it and don't register. If you're close to the line, get advice before deciding — registration changes how you levy.

How long do we have to keep the records?

Most states require scheme financial records to be kept for a set period — commonly around seven years — but retention rules vary. Keep everything; the cost of storing records is trivial next to the cost of a missing one at handover or audit.

What if we're taking over from a strata manager with almost nothing?

Get the closing fund balances, the strata roll, the current insurance policy, and any outstanding levies in writing, then treat everything else as a fresh start: open accounts in the scheme's name, set opening balances to the handover figures, and reconcile from there. See Your first 30 days as a new strata treasurer for the wider handover checklist.

This guide is general information for self-managed strata schemes in Australia. It is not legal, financial or tax advice. Banking, fund, record-keeping and GST rules differ between states and change over time — always check the strata legislation that applies to your scheme and seek professional advice before making decisions about the scheme's finances.