One of the biggest requests for HELP I get as a professional bookkeeper is to
provide support and training around accounting software.
In my last few posts, I have talked about how software is the financial engine in your business.
And identifying the differences in the software in the market.
And how to ensure you have the right one for your business.
And that it’s set up to do the right things the business needs.
The setup process is very important to ensure that the right information comes out.
And in the way that accounting professionals can understand what’s happening…
Here is a shortlist of setup items you need to have in place…
Chart of Accounts
This is your skeleton or framework of all the items that make up your business.
🚗 Assets: Things the business owns ( cash at bank, buildings, vehicles, accounts receivable ie, money that is owed to the business )
🏦 Liabilities: Things that business owes ( loans, credit cards, accounts payable ie, suppliers bills, payroll and employee entitlements, tax,)
🤑 Income: Revenue that the business makes ie, that is sales of goods or services
💰 Expenses: Money that is spent in order for the business to operate ie, employee wages, bank charges, stationery, vehicle costs, office supplies, postage, printing and freight, electricity….
🎮 Direct Costs: Or sometimes known as Cost Of Goods Sold. These are items that MUST be purchased for the business to make income or revenue. Ie, Inventory or stock items to be resold. Consultant or labor fees for services provided that are resold.
The above items all form the Chart of Accounts, and these must be setup correctly.
With opening balances added at the start (or conversion date) of the accounting period.
These balances are taken from prior period tax returns and internal resources, ie, stocktake, current bank balances and current receivables and payables.
If this setup process isn’t done in the right way, then the information that comes out of the engine won’t be correct.
Which will not provide an accurate picture of the business situation.
The other by-product of this is that it also can skew the taxation liabilities at year-end.
Many tax agents don’t go back to verify this data, they are engaged to file on the information they are provided with.
I have seen many years of tax returns being incorrect because the source data from the bookkeeping is not accurate.
So, getting set up correctly is the key.
If you are getting started and want some assistance with getting this done right I can help you.
And if you already have your accounting software in place, but want what I like to call an “ engine safety check” I can help you with that also.
An “engine safety check” is where I take a look at your accounting software in place and the data contained in it.
I can then tell you if things are accurate, and if not, where the issues are and what needs to take place to remedy the problem.
Comment below and let me know if you would like to set some time up with me to help you.