Institute of Certified Bookkeepers

What does a bookkeeper or BAS agent do? How can they assist you in meeting your obligations as a business owner? What should you expect in terms of qualifications and experience?

Bookkeeping Explained

Bookkeeping today is far more than just entering data and reconciling the bank account. Bookkeeping is thinking about the needs of the business operations, assessing what systems are in use, adjusting processes for greater efficiency, producing reports based on accurate data and providing validation for those results. Good bookkeeping is an integration of business systems and financial accounts to provide the business owner visibility in running the business well.

The accounting system these days is generally the same system that is used to run the business – bookkeeping is simply a functional part of the natural business systems used in day-to-day business activities.

Regardless of the accounting system in use, there should be consistency in the processes used by the bookkeeper, clear information, validation or supporting documents easily accessed, and clear communication to you on a regular basis.

Not all businesses require the same bookkeeping tasks to be performed, and not all require the same level of detail to be recorded in the accounts. Consider what is the minimum required for you, as a business owner, to run relevant financial and business reports.

The Bookkeeping Process

  • Checklists: these should be used for consistent professional bookkeeping.
    This could be weekly, monthly or quarterly.
  • Sales Processes: this includes sales orders, invoicing, receiving payment and following up on late payments.
  • Purchase Processes: this includes purchase orders, bills, supplier payments and inventory management.
  • Payroll Processes: this includes the setting up employees, processing of pay runs and reporting on superannuation, PAYG tax withholding and employee entitlements.
  • Banking Processes: this includes the reconciling all of the bank accounts, the point-of-sale systems, the credit cards used for the business and to verify the reported balance against statements, as well as checking payments and receipts against bills and invoices in the accounting system.
  • Verification of Accounting Figures: it is easy to assume that “the software is always right” but problems can occur for a variety of reasons in the accounts, and prior to preparing a BAS or other reports, it is essential that the bookkeeper verifies the figures being reported.
  • Reporting to the Owner: the financial reports need to be inspected on a regular basis. The bookkeeper should be able to provide reliable reports, commonly on a monthly basis and quarterly with BAS related reports. Most accounting systems have a range of reporting options that the bookkeeper can adjust in specific format in collaboration with the business requirements. Additionally, the bookkeeper can provide guidance in how to read financial reports creating ease to access necessary information.

How Your Bookkeeper can Help with Compliance Obligations

There are many legal obligations that a business owner must comply with, and it is not always easy to keep on top of these responsibilities. The bookkeeper can assist you in providing general information and guidance, and acting as a liaison or intermediary between you and government entities, such as the Fair Work Ombudsman, additionally meeting compliance deadlines.

Other areas that may require assistance with include superannuation guarantee, BAS reporting, payroll tax, record keeping, contractors and employees, national employment standards, correct withholding tax from termination payments, when to charge and claim GST and valid supplier ABNs.

Bookkeeper Qualities and Expectations

There are some important qualities you will need in a bookkeeper. You are giving the bookkeeper access to confidential information about your business and personnel. You want to be certain that this person is trustworthy and able to confidently report on your financial situation. The areas to focus on include:

  • Knowledge of general accounting principles, relevant legislation and current best practices.
  • IT general skills, especially pertaining to accounting software, online government portals and electronic payments.
  • Consistency, reliability and trustworthiness.
  • Honesty – particularly in reporting problems, gaps in knowledge requiring research or mistakes that may have been made.
  • Professional code of conduct evidenced by a high standard of service and strong work ethic.
  • Able to research and analyse problems in the accounts.
  • Speed and accuracy in data entry and typing.
  • Regular professional development and professional indemnity insurance.
  • Professional membership organisation that provides access to best practice resources, technical guidance and a network of peers.
  • Bookkeepers providing BAS services must be registered BAS agents with the Tax Practitioners Board.

Why You Need a Bookkeeper:

  • To keep all of the records up to date so you can get accurate financial reports, and to assist with legal record keeping requirements.
  • To help in keeping your end of year accounting bills down; by accurate processing throughout the year, there are fewer adjustments required by the tax agent.
  • To avoid late penalties by making sure the GST, PAYG tax and superannuation compliance obligations are attended to.
  • Free up your time so you can work on your business rather than trying to do tasks better done by an expert bookkeeper.
  • Receive information about patterns, trends and cycles, areas of growth or reduction and potential issues.
  • Minimise the risk of fraud by having another set of eyes overseeing your accounts and conducting ongoing auditing and assurance.
  • Having someone on your side that can advise and support you in many aspects of your business – from daily operations and business systems to the big picture of how your business is performing and achieving business goals.

You and Your Bookkeeper Working towards Success

A professional bookkeeper concentrating on the required regular tasks to manage your business in a financial and accounting capacity, can also provide trusted guidance and valuable insight into areas of your business impacting your results. This will allow you to focus on providing quality goods and services to your customers and lead you towards continued success.

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