Client account reconciliation for letting agents: why it eats so much time, and how open banking cuts it down

Letting agents in England that hold client money have had to belong to a government-approved Client Money Protection scheme since April 2019, and an agency that doesn't can be fined up to £30,000. Propertymark estimates that letting agents hold around £2.7 billion of client money at any one time.

The rules themselves aren't hard to understand. Keep client money separate, know whose money it is, and be able to show that the figures add up. The last part is where agencies spend the most time and run into the most trouble, and a lot of that trouble starts with the payment, long before anyone opens the reconciliation.

What the schemes ask for

There are six approved schemes: Client Money Protect, Money Shield, Propertymark, RICS, Safeagent and UKALA. The detail varies, but they share the same basics.

Client money has to sit in an account with an FCA-authorised bank or building society, separate from the agency's own money. The agency has to reconcile regularly, checking the client cash book against the bank statement and against the total of each client's ledger balance. Propertymark's rules, for instance, set out how often this should happen and what supporting records must be kept. No payment should be made for a client beyond what's actually held for them. And the records need to be available if the scheme or its accountant asks to see them.

None of that is complicated on paper. The problem is the quality of the information coming in.

Why reconciliation goes wrong

Reconciling a client account means tying every pound in the bank to a named client and a reason. It tends to fail in the same few ways.

Tenants type their own references, so a payment might come in as a flat number, the word "rent", or a name that doesn't quite match the tenancy. Someone has to work out who it's from. Tenants also pay in pieces, or pay two months at once, and each of those has to be split and allocated by hand. Some money arrives that nobody can place at all and sits in suspense for weeks. Direct Debit collections take days to clear and can be reversed later, so a ledger that balanced on Monday might not balance on Friday. And when all of this is dealt with once a month, every problem lands at the same time.

The common thread is that the payment arrives without the information needed to allocate it. Better matching software speeds up the matching, but it can't add details that were never sent.

Fixing the information at the source

Open banking helps because it changes what comes in with the money.

With pay by bank, the agency creates the payment request, including the amount and the reference. The tenant approves it in their banking app without typing anything, so every payment arrives with a reference the agency chose, linked to one tenancy and one charge. Because the agency also sets the amount, part payments only happen when the agency asks for them, and arrears can be requested as a separate line.

Payments settle over Faster Payments in seconds and the agency gets confirmation that a specific request has been paid. That can update the right client ledger straight away, instead of waiting for a statement to be imported. And since the tenant authorised the payment with their own bank, there's no chargeback or indemnity route that pulls money back out after it has been allocated or passed to a landlord.

Open banking can also provide a live feed of the client account's balance and transactions, with the agency's permission, so the bank side of the reconciliation can be checked whenever it's needed.

Reconciling daily becomes realistic

Most agencies reconcile monthly because doing it more often just means doing the same manual matching more often. When most receipts arrive already matched, the few exceptions left can be cleared every day.

That means problems get caught while they're small. A missed payment shows up on the day, an unknown receipt gets queried while the payer still remembers sending it, and a ledger discrepancy is found before money goes out. When a scheme, an auditor or a landlord asks for evidence, it already exists.

Why landlords care too

Since 6 April 2026, landlords with qualifying income over £50,000 have had to keep digital records and send HMRC quarterly updates under Making Tax Digital. The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028.

Those landlords depend on their agent's statements. Clearly referenced, itemised rent receipts go straight into their quarterly records. Payments that were allocated late or wrongly create work for the landlord and their accountant, and the landlord will know whose statement caused it.

How Fena helps

Fena is an FCA-regulated open banking provider. Agencies use our payment links, QR codes and recurring payment requests to collect rent and other client money straight into their client account, each with a reference the agency sets. Our account information APIs give consented bank data for live balance checks, and our bulk payments handle landlord remittances from the same platform. The result is much less manual matching and a reconciliation that can realistically be done every day.

Common questions

Does it work with pooled client accounts?

Yes. Because every payment carries a reference set by the agency, money coming into a pooled client account can still be allocated to the right individual client ledger.

Will our CMP scheme accept it?

CMP schemes set rules for how client money is held and accounted for, not for which payment method a tenant uses. A pay by bank payment that lands in a compliant client account is client money like any other. If in doubt, check with your scheme.

Does this replace our reconciliation?

No. You still need to reconcile the cash book, bank and client ledger as your scheme requires. Open banking makes that faster and more reliable by improving the information going into it.