Are your books “sweet” or a “rocky road”?
Have you ever been asked how your books are and casually responded with “They are sweet mate!”
As far as you’re concerned, and based on the fact that you have a bookkeeper, you ASSUME everything is up to date, reconciled and lodged.
As a business owner is it not smart to ASSUME anything when it comes to your books. Ultimately the “buck stops” with you and if your books are not up to date, reconciled and lodged correctly you could be facing some hefty fines from the ATO among other issues.
Today I will share a case study where a business owner, who had an unqualified bookkeeper, was referred to Amber Business Support.
It was not “sweet” to say the least and they were on a “rocky road”!
CLIENT INTRO
A family business run by a husband-and-wife team, in honestly (as far as I am concerned!) the best business ever! LOLLIES! They manufactured all types of lollies from rocky road and other assorted chocolate items.
They had a bookkeeper and assumed that everything was in order. It was only when she “left the bookkeeping industry” that they reached out to us.
It became quickly apparent that although she had been doing their bookkeeping, she was unqualified, their books were not correctly reconciled and although BAS had been lodged, they had not been submitted correctly.
On investigation we discovered that their books had unreconciled entries going back 4 years.
This resulted in:
· 4 years of incorrect submissions
· 4 years of decision making based on incorrect data
· 4 years of over claimed BAS and tax returns.
In their minds “this was a rocky road” that they were stressed about resolving.
CONSIDERATIONS
We needed to figure out the quickest and easiest way to ensure their books were reconciled and up to date without it costing them a fortune.
SOLUTION
The client made the decision to only focus on the current year so it didn’t affect previous lodgements over the 3 years prior.
With a 4-week goal in place we actioned the following:
1) Investigated each individual transaction to ensure it was correct or if it was duplicated.
2) Based on the investigation we sorted out the duplications by reversing the relevant duplicate transactions.
3) We re-allocated the relevant transactions to the correct loan accounts.
4) Once the transactions were dealt with, we re reconciled the bank accounts correctly.
5) We ensured their lodgements were up to date with the revised figures
6) Submitted the BAS worked with their accountant to submit the tax returns.
OUTCOME
· Within 4 weeks their books were up to date, lodgements were correct and submitted.
· We were able to assist them with their forecasting and budgeting going forward with accurate and correct data on hand.
· They had peace of mind that everything was 100% correct.
CONCLUSION
· It is never safe to assume your books are up to date.
· Using a qualified bookkeeper is vital, as this ensures your bookkeeping details are up to date, reconciled and submitted correctly.
· Up to date books enables you to make educated business decisions going forward.
Now that their books are up to date they are (thankfully!) able to carry on focussing on their business of making delectable and tasty treats!
If you feel like your books are a bit of a “rocky road” and want to ensure you and your business are set up for “sweet success” I invite you to reach out to me and my team.
