I use a bookkeeper for my business BAS, and an accountant for my tax. The bookkeeper enters all the business data on an Excel spreadsheet which I give to the accountant with the rest of my information. I've discovered that the bookkeeper has made a major error every year (for 6 years) by entering my receipts incorrectly, so I have paid a lot more tax than I should have. The accountant has had the original documents as well as the spreadsheets. Should he have checked the spreadsheet data??Thanks!
that all depends if you discussed the possibility of the bookkeeper making a mess of it. I know I am talking from your bean-counters side of the fence, but if you want your accountant to check every transaction in an excel spreadsheet the accounting costs would be astronomical.
It also depends on whether you gave your accountant ALL the supporting documents ans receipts and asked him/her to review the spreadsheet.....again very expensive at bean counter hourly rates.
In the vast majority of cases the accountant has to apply a liberal dose of practicality to his role and has to assume that between the bookkeeper and the business owner someone is checking stuff BEFORE it gets to the accountant.
There is a LOT of stuff that your accountant should check, for example whether your accounting data matches up to the BAS' lodged. In this case it would have because the accounting data (excel) clearly did match up to the BAS......hence no alarm bells and no phone calls from your bean-counter.
I have to say that the biggest problem you have is your spreadsheet. it is nothing more than a BIIIG electronic list of numbers, and as a tool to manage and advise, I put Excel in the same catagory as a corn flakes packet of receipts.... pretty much useless but marginally better than nothing at all.
Do yourself a massive favour and get onto MYOB Essentials, or Xero. Talk to you accountant about what you can rectify with amended tax returns and BAS'....and be prepared to be disappointed here, because the period of time that you CAN amend is 4 years, so you wont be able to fix it all.
And find a better bookkeeper. better still: use MYOB Essentials and do it yourself....then you will know it is right:)
I have to agree with Brendan. I am a small business owner and I do all of my own Xero each month and prepare my own BAS and quarterly P&L. My accountant has access to the Xero data so he extracts the summaries at year end.
If my accountant was to check every invoice or every entry my $2275 annual bill would be over $10,000 at the very least.
The cost of Xero is $50 per month including payroll and bank reconciliation. A bookkeeper who knows Xero could enter all of your stuff in about 2 hours per month at about $50 per hour.
As for catching up and fixing the previous years, get onto it now so that you don’t miss the opportunity.
Best of luck with your new software and your new bookkeeper.
Thanks, Brendan I appreciate your response. It is a shady area, I guess. My accountant charges me for "quality control" for a few hours (at $300/hr) to review some data but clearly not all. The errors on the spreadsheet were large, repetitive and obvious (i.e. I picked them up myself when I had to start doing the entry myself, as my bookkeeper is retiring....). Again, thanks for your opinion.
I dont want to go on a bookkeeper bashing expedition, but it sounds to me like your bookkeeper has not moved with the times. You almost certainly need to find a better solution.
In terms of what to use, I recommend MYOB over Xero, mainly due to the support that MYOB offers is better......that being said either product works great, and there is LOTS of how-to videos to explain how to do stuff.
I would strongly recommend that you go with whatever product your bean-counter tells you to use, because they can:
a: help you set it up
b: help you stay in control
c: get reports and data out a lot easier (ie CHEAPER) to use at their end
If your accountant is not super keen on the cloud based options, punt him too. Seriously. The time and efficiency gains you and your accountant get out of a cloud based system is mind-blowing.
You will find that you will be doing 95% of what you used to pay your bookkeeper and accountant to do, and then the services you ACTUALLY need become tax management and wealth creation advice, not bookkeeping and talking about last years tax return after the event when its too late to do anything about it!!!
I agree with Brendan, you are long overdue for an Accounting Package and a decent Bookkeeper. I have been a bookkeeper for 20 years and I can't tell you how many times I have to go in and clean up rubbish because the bookkeeper was not qualified and the Business owner did not understand the value that a qualified person can bring to the business.
When looking for a replacement ensure that they have at least their bookkeeping certIV and they should probably be a BAS Agent (that way you know that they have to have enough knowledge to satisfy the Tax Practitioners Board.)
It is important that that your Bookkeeper also has a working relationship with your Accountant so that they understand how to provide the best service to you.
I would also suggest "MYOB essentials" as a good starting point for a new user as it is nice and simple to use and learn. Its also easy to correct user error from an Advisors side of things.
Xero is not a bad product but my experience is that very few people that are using it are really using it to its full potential, so they are paying more money than they need to be.
Hope that helps :)