Or... how we can save you time, grief and money!
We often have clients ask us why we are particular about source documentation when undertaking work on their behalf, rather than just "taking their word for it", or "it's on the bank statement".
Recently working with a new client who had a $12,000 withdrawal from the bank account. It was a deposit on a new motor vehicle, and they were expecting us to "record it and claim the GST".
We insisted on seeing all the documentation relating to the purchase of the vehicle, including the loan documents.
This enabled us to record the vehicle purchase transaction, and the loan transaction correctly, and to then reconcile any bank transactions that had occurred (mainly loan repayments).
In stepping through this process, we identified that the $12,000 that was paid as a deposit, had not been offset against the value of the vehicle purchase price, and the full purchase price was subsequently financed.
Why does this all matter?
1. The client had essentially over paid for the vehicle - our discovery has triggered the client to request a refund of the $12,000.
2. If we had processed based on the clients "word", we would have been overstating the value of GST credits that could be claimed by the client (>$1000).
3. If the file was reviewed by another bookkeeper or accountant, there would have been no justification for the expense that was made.
4. If the client had been audited by the ATO (and it's not uncommon for that to occur), this is likely to have been a transaction that would have flagged. What may have been a simple audit, may then have triggered a full audit, due to poor record keeping.
So, the moral of the story is..... if your bookkeeper is asking you for source documentation, its not so they can ruin your day. It is because they understand how your accounting records should be compiled and have checks and balances in place to ensure that your records are as accurate as possible, and that you are never in a situation where somebody owes you $12,000!
There are multiple ways we can get hold of your documents - from the old fashioned shoe box or paper bag dropped at our office, or the more sophisticated transmission using online services.
If you want to find out how we can help you streamline your bookkeeping, take care of your paper mountain (yes... you can get rid of it!), or know that somebody has your back, and is looking for that over payment (or sadly, sometimes under payment...), don't hesitate to contact us to find out more.
We can recommend a solution that is the best fit for YOUR business.
For the second year in a row, are privileged to be recognised by HubDoc, one of the industry leaders in the automation of financial documents, as a Top 50 Cloud Accountant for 2017.
While we are a bookkeeping practice, not an accounting practice, to be considered in the same breath as other accounting and bookkeeping practices is humbling.
Why were we recognised? We use the synergy that occurs by running ours, and our clients businesses in a cloud based environment, maximising the potential of information exchange, using tools to eliminate repetitive and time consuming tasks, to have access to real time information.
Interested in finding out how we can assist you and your business leverage the power of cloud accounting? Don't hesitate to contact us for an obligation free chat about you and your business needs.
Bookkeeper and Accountant Collaboration - eight REAL things an accountant should look for when looking for a bookkeeper to collaborate with
There has been an "interesting" article published within the last few days, identifying 8 things to look for when selecting a bookkeeper to collaborate with. The article is (apparently) addressed to accounting firms that are looking to develop a collaborative relationship with bookkeepers.
The article has been edited since its original publication (there was a reference to a home based bookkeeper, in between working with your clients, taking kids to school, hanging out the washing, and watching Dr Phil - the original of the article can be found here), but the underlying message in the article has not changed - it implied that if you were the owner of a bookkeeping practice, earning less than $75,000 per year, working from home as a sole operator, not using cloud based accounting software, not across a wide variety of add-on applications, without a webpage, and using a mobile phone to run your business with, then you were not a bookkeeping practice that an accountant should collaborate with.
Understandably, this has caused great consternation within the bookkeeping and (I'm pleased to say) accounting industry. I administer the Bookkeepers in Practice (Australia) Facebook group (800+ members), and also co-admin the Bookkeepers Revolution Facebook group and the Bookkeeper Revolution LinkedIn Group (10,000+ members combined), and the response by members of these groups, to the points made in the original article have been scathing.
There is also irony, that recently, I facilitated a webinar with Chris Wheatley, principal of Scope Accounting on the topic of "Bookkeepers and Accountants - working together collaboratively", and the ongoing development of positive relationships between the bookkeeping and accounting industry is one that I am passionate about.
As part of the discussion, we asked bookkeepers to respond to "what would be the one thing to say" about the relationship between bookkeepers and accountants. The responses are summarised below, but highlight many of the challenges that we already face, without the negativity espoused in the original article!
The original article referenced has done nothing towards developing a positive relationship between bookkeepers and accountants, and some now feel that it has or will have a retrograde impact if left unanswered.
So here it is - from a bookkeeper who has been operating their own practice for 10+ years, both as a sole operator and with staff, who has worked from commercial premises and home based offices, and who has worked collaboratively with accountants since entering the profession in the early 2000's..... 8 REAL things an accountant should look for when looking for a bookkeeper to collaborate with.
Oh, and by the way, this article can be completely flipped, and could also be titled 8 REAL things a bookkeeper should look for when looking for an accountant to collaborate with.
One - Are they a Registered BAS Agent?
Is the bookkeeper a registered BAS Agent - if they hold this registration then you know that they have the education, experience and legal authority to work with your clients undertaking BAS Agent services. You can also be assured that your clients are protected by the safe harbour provisions of the legislation, and that the bookkeeper has Professional Indemnity insurance coverage in place, and is more than likely a member of a recognised professional association.
In addition, you can also be assured that the bookkeeper is undergoing a cycle of continuous professional development, which is one of the requirements of maintaining the BAS Agent registration status.
Respect the skills that the bookkeeper has as a Registered BAS Agent - they've earned it!
Two - Do they understand the industries that you work with?
Fairly self explanatory really - if you focus on a specific niche industry, does the bookkeeper that you choose to partner with have a deep understanding of the industry, and the issues around it. If working in retail or hospitality, are they aware of the nuances relating to superannuation guarantee thresholds and shift loading? Have they had exposure to complex inventory environments, and understand the different way stock may be accounted for?
Bookkeepers can be exposed to many industries, at the grass roots level, and over the years have developed high levels of expertise in these industries. Respect it, and harness the value that they can provide to you and your clients.
Three - Will they respect the existing relationship that you have with your clients?
Nothing worse than introducing a client to a new bookkeeper and having them move the client to another accounting firm, or the bookkeeper telling your client that they have partnered with a Tax Agent, and can now facilitate the tax process themselves.
There are legitimate reasons where this may be in the best interests of the client (and as a bookkeeper I have seen as much shoddy and overpriced work from accountants as I have from bookkeepers), but any relationship that is purely based on screwing over the other party, is not one worth pursuing.
Four - Do they speak positively about relationships that they have with other accountants?
Worth considering - we all have bad experiences with our industry peers, but if all you continue to hear is negativity about those relationships, then there may be deeper issues and considerations to factor into the decision to enter into a relationship.
Five - Do they facilitate open and collaborative communication between you and your client?
Will they be available for you to discuss the work that they have done for the client, so that you can easily understand it in the context of the clients business?
Does the bookkeeper include you in communications that they have with the client on issues that may have tax or future planning implications?
Often, the bookkeeper is the first to be aware of a situation that the client may find themselves in, or something that should be flagged to an accountant for further review and discussion with the client. Find a bookkeeper who is savvy enough to understand these issues, and open the channels of communication between both you and the client so that what may be a small issue now, does not become far more urgent or complex if left too long.
Six - Do they respect the boundaries of the relationship and is it in the best interests of the client?
Is the bookkeeper prepared to enter into a discussion with you about what you do for the client, and about what they do for the client, and put boundaries and protocols in place for dealing with the client, to ensure that there is no duplication of effort?
The collaboration between bookkeeper and accountant, should by one of synergy, with the ultimate outcome being the provision of a services that is in the best interests of the client.
Seven - Are they continuously learning and updating their skill base, and open to new opportunities and ways of thinking?
Any good bookkeeper worth their salt, is involved in a continuous learning cycle, not just to meet CPD requirements, but to enhance their service offering to their clients, maintain industry expertise, and provide high quality services in the marketplace.
They should be adaptable and flexible thinkers, and be prepared to engage in new learning opportunities. They should be keeping abreast of the changes in the industry and absorbing and adapting to the changes taking place, and they themselves should be open to collaborative opportunities.
Eight - Do they drink wine?
Ok... see I added this to a) find out who actually read this far, and b) well, if you haven't got the gist of what the basis is of a high quality collaboration between bookkeepers and accountants by now, I really don't know what more to say!
Chris Wheatley, in our webinar, commented that he was starting to see a convergence of the bookkeeping and accounting industries, and that within 5-10 years, he felt that, aside from the registration for various types of compliance lodgement, that the industries would be running in parallel in terms of the skill sets and the relationships with clients.
If this does happen, then the need for collaboration will become a thing of the past, and each party will be respected for the contribution and support that they can provide their clients.
is the Director and Senior Bookkeeper at Laurus.