Mortgage Broker Accounting Software: What to Track

Commission is the easy part of a mortgage case to forget. The money arrives weeks after completion, from a lender or a network or a protection provider, in one payment that covers several cases. By then you are three cases further on, and the question that matters has changed from "did we complete?" to "has everything we completed been paid?"

This guide covers what a brokerage should track, what the FCA expects you to tell clients and keep, how to reconcile what you wrote against what arrived, and where accounting software fits. It also shows what Cleera records and what it leaves to your accounts package.

What commission tracking has to answer

A useful record answers five questions without a search through emails:

• What did each completed case earn, gross and net?
• Has that money arrived, and if so how much and when?
• Which completed cases are still unpaid?
• How much did each adviser write this month, and how much was banked?
• What did the client agree to pay you, and what did you tell them about commission?

If your spreadsheet answers the first two but not the third, the unpaid cases will wait for you to notice. A gap like that tends to surface when someone adds up a lender statement and the total does not match.

Where the money comes from

Income	Who pays it	What to record against the case
Proc fee on a mortgage	The lender, directly or through your network	Gross and net figure, whether it has been banked, when, and the amount if it differs from what you wrote
Commission on a protection policy	The insurer	Gross, net and the type of commission, per policy
Adviser fee	The client	The fee agreed, when it is due, and whether it has been paid
Retention proc fee	The lender, when a client takes a new product with you	The same as a new-business proc fee, with the product switch noted
Share paid to an introducer	You pay it	The agreed arrangement and what has accrued and been paid, so the cost is not left out of the case figure

Which? notes that it is normal for mortgage brokers to earn commission from lenders after arranging a mortgage. In practice the amount, the timing and the route the money takes vary. The rates for retention fees are covered in the retention guide, so this post stays with tracking.

What the FCA expects you to tell clients and keep

Clients must be told about fees and commission at the start. For mortgages, MCOB 4.4A.8R sets out what the initial disclosure contains, and MCOB 4.4A.12R sets when it is given, which depends on the type of firm and how the client first contacts you. Protection and other insurance disclosure is covered by ICOBS, not by MCOB 4.4A.

What MCOB 4.4A.8R requires	Reference
Any fees you will charge, when they are payable and whether any are reimbursable	4.4A.8R(1)(a) and (b)
Whether you will receive commission from a lender or a third party, and whether it is offset against your fees	4.4A.8R(1)(c)
For MCD regulated mortgage contracts, the amount of commission, or a statement that the actual amount will be disclosed later	4.4A.8R(1)(d)
Fees as a specific cash sum where possible	4.4A.8R(2)

The FCA's record-keeping schedule for MCOB asks you to keep appropriate records of these disclosures, with retention set by SYSC 9. SYSC 9.1.1R requires orderly records of your business, and the guidance in SYSC 9.1.5G says records should be kept for as long as is relevant to the purpose they were made for.

The Consumer Duty adds a second angle. Under PRIN 2A.4.16R(2)(d), a distributor's arrangements should let it identify whether the impact of the distribution arrangements, including any remuneration it or others in the chain receive, would stop a product providing fair value. The rule does not mention a commission register, but in practice you need to be able to show what you were paid on a given case, and by whom.

Written and banked: the two numbers

The most useful split in a commission record is between what you wrote and what you banked. In this post a proc fee is written when the case completes and the fee is due, and banked when the money reaches you. Firms and systems use these terms slightly differently, so agree what each means in your own records. The difference between the two is what you are owed.

Here is a short invented example for one month. The loan amounts are made up, and the 0.35% rate is only there to make the arithmetic clear. Check each lender's actual rate and your own agreement.

Case	Loan	Proc fee written (net)	Banked	Still owed
A	£250,000	£875	£875	£0
B	£180,000	£630	£630	£0
C	£320,000	£1,120	£0	£1,120
D	£210,000	£735	£700	£35
Month	£960,000	£3,360	£2,205	£1,155

Case C is plainly unpaid. Case D is the one a lump-sum statement hides: the lender paid a different amount from the one you wrote, and the difference is small enough to miss. Without a banked amount recorded per case, both disappear into a total that looks roughly right.

Some lender agreements allow a fee to be reclaimed in some circumstances. Terms differ by lender and by your own agreement, so check yours and note anything that applies against the case.

A monthly routine that catches the gaps

1. Export or list every case completed in the month, with the proc fee you wrote for each.
2. Match each payment on the lender or network statement to a case, using the lender's reference where there is one.
3. Mark each matched fee as banked, with the date. If the amount differs from what you wrote, record what actually arrived.
4. List the cases that are still unpaid and chase them, starting with the oldest.
5. Check protection commission the same way, policy by policy.
6. Look at the totals by adviser. A gap that sits with one adviser or one lender is easier to explain than one spread across the firm.

Doing this monthly takes less time than a year-end hunt, and it means you ask a lender about a three-week-old fee, not a nine-month-old one.

Where accounting software fits

Accounting software records every payment in and out, produces your accounts and gives your accountant what they need. It does not know which case a payment relates to, so it cannot tell you what is missing. A case system knows what each case should earn but is not your books.

GOV.UK says a limited company must keep accounting records for at least six years from the end of the last financial year they relate to, and those records cover money received and spent. VAT is a separate question. HMRC's guidance on finance says a supply is exempt where you act as an intermediary, while services such as advice on its own can be standard-rated, so what applies to your fees depends on what you actually supply. Ask your accountant, and read VAT Notice 701/49 together.

The link between the two is the monthly check. Your accounts show what you banked. Your case record shows what you wrote. If they disagree, one of them is wrong.

If you are an appointed representative

In a network arrangement, commission may be paid to the network first, so the statement you receive may come from the network and not from the lender. Your own record then becomes more useful. Keep the proc fee you wrote for each completed case, then compare it with the network's statement. The directly authorised and appointed representative guide covers how the money usually moves on each route, and your network agreement says what is deducted and when you are paid.

Your network also reports on you. The FCA tells principals to provide complaints and revenue data for each appointed representative every year (through REP025), so the network reports your revenue to the FCA. Your record is how you check that the figures match yours.

What Cleera records, and what it does not

Cleera is a case system, not an accounts package. It records the figures that belong to a case and lets you see them across the firm.

What it does	Where
Records the proc fee, gross and net, on the case's lender details	Edit case, lender details
Tracks each proc fee as written or banked, with an optional banked amount and a banked date when the lender paid a different net figure. Anyone who can edit the case can mark a fee banked	The proc fee section on the case
Lets you revert a banked fee to written	The same section
Records marking a fee banked, and reverting it, in the audit log, noting when the banked amount differs from the written one	Audit log
Records gross commission, net commission and the commission type on each protection policy	The protection policy details
Shows proc fees written and banked, as net figures, for the mortgage cases created in the period you select, and net protection commission for cases completed in that period	Insights
Keeps the early repayment charge schedule on the lender details	The case's lender details
Records broker fee requests sent to the client: the amount, when it is due, its VAT treatment, whether the client has confirmed paying and whether you have verified it	The case's broker fees

Firm-wide revenue figures, such as proc fees, are visible to the account Owner only. Administrators see the firm view without them, and an adviser sees Insights for their own cases only. The mortgage CRM page shows the case view, and Features lists the rest.

It does not produce accounts, submit VAT returns, import lender or network statements, or track fee reclaims. You still match each statement to your cases yourself. What it gives you is a per-case record of what you wrote and what you banked, so the match takes minutes.

Key takeaways

• Track commission per case: the figure you wrote, the figure you banked, the date, and anything that differs.
• Tell clients about fees and commission at the start, and keep a record of the disclosure (MCOB 4.4A.8R, with retention under SYSC 9).
• Reconcile monthly, starting with the oldest unpaid cases. A lump-sum statement hides small shortfalls.
• Accounting software and a case system do different jobs. The monthly check between them is what finds the errors.
• As an appointed representative, keep your own record of what you wrote and compare it with the network's statement.

Sources

• FCA Handbook, MCOB 4.4A
• FCA Handbook, MCOB Schedule 1: record keeping requirements
• FCA Handbook, SYSC 9.1
• FCA Handbook, PRIN 2A.4
• FCA, appointed representatives: principals
• Which?, choosing a mortgage broker
• GOV.UK, company and accounting records
• HMRC, VAT Notice 701/49: finance