Author: Tailored Accounts
Many of our clients don’t have an accounting background, so it can be difficult for them to check the work of their accountant or bookkeeper. Knowing that the certainty of work being done right can take a load off everyone's shoulders, here are 10 things to tick off with your trusted advisor.
1. STP Reconciliation: Confirm that your bookkeeper and/or accountant has conducted a reconciliation between total salary and PAYG withholding in the payment summary report sent to the ATO, totalling W1 and W2 reported on BASs during the financial year.
2. Business Activity Statement (BAS): Ask your bookkeeper to run an annual BAS report as of 30th June and compare it with your BASs lodged to the ATO. Any discrepancy will need an explanation.
3. Bank: Look at the bank reconciliation report as of 30th June. Compare that with your bank’s closing balance as of 30th June, even a $1 discrepancy deserves a further check.
4. Aged Receivable & Payable Report as of 30th June: Review this report to ensure that it makes sense to you. Is there a debtor that you’ve already paid that’s still showing up?
5. Asset & Equipment: Review asset and equipment movement in the Balance Sheet between this year and last year. Have you purchased any asset that has not been included in this year’s balance sheet? Should you use Instant Asset Write Off this year?
6. Balance on GST Payable Account: Does this account show the balance of your last BAS quarter? Is it indicating that you owe the Tax Office more than $100k? If you don’t have any cash-flow problems, what would be the cause of that?
7. Balance on super payable account: Is it showing the balance of your last quarter super only? Anything more would deserve a closer look.
8. Balance on Loan and Lease Account: Check your Loan and Lease statement as of 30th June to ensure that it is reconciled.
9. Leave Balance: Print out your payroll leave balance (in dollar value) and compare it to your leave provisional liability in the Balance Sheet. If an employee has a 2-month Long Service Leave (LSL) balance when your balance sheet is showing no provision for LSL, it’s time for you to ask questions.
10. Are any transactions being posted to your account? This could be general expenses, miscellaneous expenses, sundry expenses, unallocated expenses, drawings etc. This is a good indicator of lazy data entry.
Here at Tailored Accounts, we teach our clients to conduct a review of our work using these checkpoints. Your financial figures make more sense to you than to us. And on the off-chance that you pick up something that we won’t, we much rather be “accurate” than “right”.
If you are interested in learning more about how to diagnose your books and accounts status, please don’t hesitate to contact us.
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