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.
Bookkeepers come in many variations - not size or shape, but business structure and the way that they operate. There are sole traders, companies, partnerships, trusts. The principal may work alone in their practice, or may employ staff or subcontract out work, either locally or overseas.
One of the key challenges that seems to face many owners of bookkeeping practices, is their inability to step away from the desk, for more than a few hours at a time.
A recent article by MindHealthConnect, stated that "there is a tendency for work to have a negative impact on other areas of life" and "that certain groups are more affected than others by work-life interference".
Included in the list of groups were:
I often hear when bookkeepers are talking about the relationship they have with their clients "I feel like I'm their b*&$@%y mother [suffixed with a sob, sigh or a giggle]". Ah, that sense of caring and nurturing the extended family!
There is often a perception when working with clients, that we are indispensable to them, and we are continuously faced with the challenge of taking time away from our business, to go on that long weekend, to deal with a sick family member, or take the 2 month overseas holiday to [insert your bucket list location here].
If we don't start to put ourselves at the front, the stress and burnout caused by poor work/life balance will have severe consequences on our own health, and the ongoing health of our businesses, relationships and families.
It can be a challenge. It can be terrifying. It can be done!
It is easier to beg forgiveness than ask permission
What do I mean by that statement? You are a business owner. You are in control of your business. You make the decisions. I'm assuming that your bank manager, accountant, mechanic, dentist, hairdresser or doctor doesn't seek approval from you or their client base, when they decide to take some time off.
I'm also figuring that your clients don't [always] inform you that they are going away either (I know with some of mine, it's only when I see the transactions through the bank account that I'm aware of it).
They schedule in the time. They buy the tickets. And then they [sometimes] inform their client base that they will be away.
I'm certainly not advocating that you drop everything and rush out that door with your sunhat and bikini right now, but what I am saying, is that with forward planning and preparation, it will easily become a reality.
Pretty self evident really - you need to plan your exit strategy. This can be a challenge because we all have a sense at times that the world wont go on without us. Newsflash, and a burst to the bubble - it does and it will. Get over it.
Start having conversations with your clients in advance. Tell them that you will be heading away, and that this is how you will be managing the work you need to do in your absence - take control of the conversation.
Planning starts even further back, by including statements in your Letters of Engagement (which of course, you all have), that indicate that you have other staff (even if you don't) or you may utilise subcontractors or third party services (even if you don't).
I know that the Australian Bookkeepers Network has some great wording around this, and I assume that the other professional associations have similar resources available. This also meets some of the Code of Conduct requirements from the Tax Practitioners Board regarding confidentiality.
You will find with most clients, they are not concerned that you will be going away, but are more concerned that there will be continuity of service. Allay those fears, talk to them about outcomes and solutions, and it becomes an easier exit.
But I'm the only person in my business - I cant possibly leave!
Develop a network of trusted peers and professionals that you are happy to work with. Be there for each other and start talking sooner rather than later about the strategies you will employ to provide coverage while you are away.
I've provided this support to two separate bookkeeping practices, over the last 12 months. One was a sole trader, based interstate, that I had never met before, but who was a member of the Bookkeepers in Practice (Australia) Facebook group that I administer. The second was a well established practice in Brisbane, with 3 staff who needed BAS Agent support across end of financial year, while they were overseas for 4 weeks.
The sole trader bookkeeper reached out, explaining that they were going away for two weeks, and had one particular client that needed routine support during that time.
In this situation, the bookkeeper had communicated fully with the client about who I was, and the client was happy to sign a letter of engagement with me for the two week period. I had a formal agreement with the bookkeeper, that this was for two weeks only, and that I would have (nor want) any ongoing claim to the client. Based on trust, absolutely, but we spoke through these issues in our initial conversations so that we were both comfortable with the arrangements.
The principal of the second practice also reached out almost 12 months in advance of when they would be away. We met, and discussed the methodologies that we both used to undertake the EOFY requirements (mainly around preparation of the Payment Summary Annual Reports), and agreed on a process for dealing with the work that was to come through. Again, we had open discussion about the relationship with the clients, and how we would communicate with staff.
This year, I spent just over two weeks away from my office, and the principal of the second practice, was available to my staff if they needed support while I was away - quid pro quo.
Systems and processes
Having good systems and processes in place makes the transition to another person much easier to achieve. If you don't have them, then your desire to step away from the office can be a catalyst to their development.
Speaking from experience, once you start to document and implement systems to support what you do, there are other benefits that start to flow on from it. One of the key ones I found was that as I started to employ staff, it was far easier to delegate the routine work to them, as I had the systems in place to support it.
If you are a sole operator, and struggling with getting away from the desk, or overwhelmed by the volume of work, staffing is often a viable solution, but may be delayed because we don't know how to bring somebody new into the business. Systems... systems... systems.... need I say more!
Empower your people
Whether you have staff, or you choose to get an external resource to support you during this time, the greatest benefit you will receive is if they are empowered to make decisions that would normally be left to you.
If you are using an industry peer, then I'm assuming you would select them based on their skill, knowledge and professionalism. If a decision needs to be made while you are away about work for a client, give them the flexibility to make that decision (obviously within reason) - you selected them for a purpose.
Additionally, give your staff the ability to make decisions (again within reason). If you've set your systems up, and have great protocols regarding communication and process, empowering your staff to make decisions within this framework will enable you to walk away with confidence.
Don't just wait until you are gone to empower them, start doing it now, so that by the time you do need to step away, they and you have the confidence to operate without your micro-management.
Unless you are heading to the remote highlands of Timbuktu, and the ability to get wireless is completely impossible, technology will be your friend.
I'm not suggesting that you use the technology to do the work that you would normally be doing (that is not a holiday!), but use it to stay in touch with your staff, or your nominated person.
During my recent trip to Cambodia (who's internet speeds are far better than in Australia!), I made a point of checking messages (not emails) from my staff once a day.
All my emails had been forwarded to a central email account where staff could manage and deal with as required.
Staff knew to only send me a message (we use Microsoft Teams) if it was something that absolutely needed my input or direction on (they had been empowered to make decisions already, and had an industry peer to contact if there was something curly).
I did no work while I was away - none, zilch, zip, and slept soundly every night (except for the one where we were in a village, and the roosters didn't realise that 1 am in the morning was not considered dawn, but that's another story)
In the past 6 years or so, I've managed to travel to Dubai, Bali, Japan, Vanuatu and Cambodia. In the next few years, I've got other locations on my radar, and will not be letting work take away the opportunity for me to achieve those goals - isn't that why we work? To find the balance is important, and critical to our and our families ongoing health and well-being.
If you have clients that get pissy with you that you are taking time for yourself and your family, it beg's the question as to whether you really need them as a client.
It will be daunting the first time you do it. But hell, it will be worth it!
(Originally published on LinkedIn - 18 May 2017 )
is the Director and Senior Bookkeeper at Laurus.