Preparing the Financial Settlement Schedule

EmilyBilling · ‎21-06-2016

Last updated: 12 October 2020
Jurisdiction: ALL, except where noted

PEXA’s Financial Settlement Schedule (FSS) is a collaborative tool that contains electronic financial transaction directions for all source and destination line items. All payments are disbursed automatically at settlement, so you’ll no longer spend time waiting for cheques to clear.

On this page, you’ll learn how to:

Enter the Balance due to Vendor amount.
Enter destination and source line items.
Enter extra details.
Add shortfall or surplus amount.
Verify and authorise the source funds.
Sign the Financial Settlement Schedule (FSS).
Access extra financial settlement options.
Understand the settlement process.

Preparing the Financial Settlement Schedule

The Financial Settlement Schedule (FSS) is completed by each participant prior to finalising a transfer in PEXA. The FSS should be completed once the following has occurred:

Relevant documents have been prepared; and
All financial adjustments have been agreed between the parties.

Entering the Balance due to Vendor amount

Note: This section is relevant to users who have access to the Enhanced Settlement Summary (currently SA subscribers)

The Balance due to Vendor* is an agreed amount (between the Proprietor on Title and Incoming Proprietor) that the vendor will receive from the purchaser. This is calculated by purchase price, minus deposit paid, plus/minus net adjustments. The Balance due to Vendor amount is mandatory in the Workspace and the responsibility to enter and agree on this amount is shared between the Proprietor on Title and Incoming Proprietor.

Either the Proprietor on Title or Incoming Proprietor can enter this amount in the FSS. After one participant enters this amount, the other participant (for example, the Proprietor on Title if the Incoming Proprietor entered this amount, or vice versa) can agree to this amount (either via a confirmation dialog, or by signing the FSS).

*This terminology varies based on your jurisdiction:

NSW—Amount due on Settlement
VIC—Balance due to Vendor
QLD—Balance due to Vendor
SA—Balance due to Vendor by Purchaser
WA—Balance due to effect Settlement
ACT—Amount due to Seller

Entering line items

The Incoming Proprietor and Proprietor on Title are required to enter their destination and source line items.

Click Settlement from the left-hand menu to go to the Financial Settlement Schedule screen.
By default, the Settlement Summary tab displays, showing an itemised view of funds for both the incoming and outgoing parties.
Enter your financial line items:
1. Select Sources > Add Source to enter source line items.
2. Select Destination > Add Destination or Payments and Adjustments > Add Destination to enter destination line items or add adjustments.

The following table explains the field options that can be selected when creating Line Items in the financial Settlement Schedule.

Source and Destination Line Item Categories
FSS tab	Description	Available options	Select this option if…
Source	Funds required to settle the transfer transaction	Source Categories	Loans proceeds	You are acting on behalf of a financial institution providing loan funds
				You client has deposited funds to your trust account or the PEXA Source account (whichever is registered as a source account in your profile). Note: Currently only trust accounts with CBA, Westpac, NAB, and ANZ can be registered with PEXA. You must ‘Verify’ and ‘Authorise’ any finds coming from trust.
			Loan Registry Lodgement Fees / Stamp Duty /. FHOG / PEXA Fees	You want to clearly identify which source funds are to be allocated to particular fees or outgoings (e.g. stamp duty).
			Linked Settlement	You have linked two or more Workspaces for settlement and funds from a preceding Workspace will be used as source funds in the current Workspace.
			Other	Funds do not relate to one of the predefined source categories, such as where you represent a Vendor who is required to contribute source funds, for example, where purchase price is not sufficient to payout the vendor’s loan.
			Purchaser’s Equity	If there is a shortfall to be drawn.
Destination	Where the settlement funds are going	Destination Categories	Loan Payout	If you act for a lender requiring the loan to be paid out at settlement.
			Third Party Beneficiary / Body Corporate Fees / Council Rates / Water Rates	Both parties (representatives of the Vendor and Purchaser) are required to Sign these financial line items and will have visibility of the account and BSB numbers.
			Linked Financial Settlement (Interim Account)	If you are linking two or more Workspace for Sequential Settlement.
			Vendor’s Funds	If you have surplus funds to be disbursed to the Vendor.
			Professional Fees	Trust account: Your practice’s trust account. Office account: Your office/everyday account.
			Other	Funds do not relate to one of the predefined destination categories. Examples include funds for coverage of a statutory charge or payment. The other participants won’t see the account and BSB number, They will see the category and dollar amount only.
			Vendor’s Funds	If there is a vendor surplus to be disbursed.

Land Registry fees are automatically added as a Line Item in the Destination Funds. These are collected by PEXA on behalf of the Land Registry and then passed on to the Land Registry.
Each participant is charged a PEXA fee which will automatically be entered as Line Items in the Destination Tab.
Unpaid Stamp Duty is automatically entered as a Line Item in the Destination Tab.
On Saving you will be taken back to the Sources or Destination tab in the Financial Settlement Schedule. Notice that the financial Line Item is now displayed. You can edit or remove a Line Item at any time before settlement.
Editing or removing a Line Item will cause the FSS to become Unsigned (if it had previously been Signed). In this case, communicate via PEXA Conversations ASAP. PEXA will also send an email notification that the FSS has been Unsigned.

Underlying Account Details (source funds) and Final Account Details (destination funds)

These optional fields are relevant for practitioners representing financial institutions. Both are for informational purposes only and provide ability to include details which will appear on settlement reports.

This information does not drive any functionality in PEXA. It will appear in the financial Line Item details.

Underlying Account Details (optional field): For example, the source Financial Institution is providing loan funds and they want to record the actual loan account that the funds are coming from.

Final Account Details (optional field): For example, where a Financial Institution or practitioner is disbursing all funds to a single account they can then enter a ‘final’ account which shows the actual account that funds are to be disbursed to after settlement; (this would be a manual movement external to PEXA).

Adding the shortfall or vendor surplus

Note: This section is relevant to users who have access to the Enhanced Settlement Summary (currently SA subscribers)

Depending on who is assigned responsibility for handling the shortfall or the surplus amount, the buttons available on this screen will vary according to the participant’s Workspace role.

Adding the shortfall amount

Specify client authority to provide shortfall.
The Incoming Mortgagee specifies (via the Transfer Indicators panel) who has authority to draw the shortfall amount from the Incoming Proprietor’s account.
- Yes: The Incoming Mortgagee holds client authority
- No: The Incoming Mortgagee does not hold client authority
  
  In addition, the Incoming Mortgagee can optionally enter the last four digits of the account that the shortfall will be drawn from.
Complete the purchaser line items.
The Incoming Proprietor completes the purchaser line items in one of two ways:
- Yes: The Incoming Mortgagee holds client authority
  Where the Incoming Mortgagee is handling shortfall, the Incoming Proprietor clicks Ready for shortfall to indicate they have finalised their line items. This notifies the Incoming Mortgagee that they may now add or update the shortfall amount in their source line items.
- No: The Incoming Mortgagee does not hold client authority
  Where the Incoming Mortgagee is not handling shortfall, the Incoming Proprietor clicks the Mark as complete button to indicate they have completed their line items. This then enables the Ready for shortfall button, which allows them to view or add the shortfall amount in their source line item.
Add or update the shortfall amount.
The participant who is assigned to handle the shortfall clicks the Add as shortfall button where they’ll then be directed to the Add/Edit Source line item entry screen. From there, they can view or edit the pre-populated shortfall amount (which is based on the new calculations built by PEXA).

Adding the vendor surplus amount

Assign vendor surplus responsibility.
Either the Proprietor on Title or Mortgagee on Title specifies (via the Transfer Indicators panel) who is responsible for directing the vendor surplus.
Complete the vendor line items.
The Proprietor on Title completes the vendor line items only if the Mortgagee on Title is responsible for directing the vendor surplus.

In this scenario, the Proprietor on Title must click Ready for surplus to indicate they have completed their line items. This notifies the Mortgagee on Title that they may now add or update the surplus amount.
Add or update the vendor surplus amount.
The participant who is directing the vendor surplus (Proprietor on Title or Mortgagee on Title) clicks the Add as vendor surplus button where they’ll be directed to the Add/Edit Destination line item entry screen. From there, they can view or edit the pr-populated the surplus amount (which is based on the new calculations built by PEXA).

Continue to the next article to find out about Verifying and Authorising Source Funds.

Completing the Getting Started with PEXA program? See whats next.

Now that you'know how the Financial Settlement Schedule operates, learn about how you can verify and authorise funds for settlement in the article Verifying and Authorising Source Funds.