Separation of Church and State – I mean accounting and bookkeeping!

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I do want to be transparent before I begin!!!!!

Accountants AND bookkeepers BOTH have their place and space in the world of business and particularly YOUR business!

The truth is a good bookkeeper and a good accountant do have one common goal and that is “to do the right thing”. That means keeping ensuring you are compliant, up to date and moving towards your business goals

Recently we have seen a big move of accountants recommending that their clients bring their bookkeeping “in house” and there are 3 main reasons why:

  1. Advise: Usually your accountant will make the suggestion to bring your bookkeeping in house as they now offer a bookkeeping arm.
  2. Dealing and Billing: You will only be dealing with one business.
  3. Save you money: You accountant believes that they can save you money by bringing it in house.

Although these may initially seem like good ideas, when you consider moving your bookkeeper to your accounting firm there are 4 key considerations to be mindful of and questions to ask, which I simply call the A, B, C and D’s.

“The devil is often in the detail” is the saying that comes to mind. With ‘separation of church and state’ you will have peace of mind knowing that your accountant is checking your bookkeepers work and your bookkeeper is checking your accountants work.
The questions to ask: “If you are bringing my bookkeeping into your accounting firm who is checking your bookkeepers / accountant work? Is it the same people / person?”

BAS can be done by a bookkeeper who is a registered BAS agent or any accountant who has registered as a BAS or tax agent.
A bookkeeper who is a registered BAS agent has a call of duty to closely follow the BAS rules in order to retain their BAS agent registration. These rules require the close checking of paperwork and the accuracy of data.
Accountants generally create all data from bank feeds as opposed to requesting the paperwork.
This, when not accurate, can have an overall effect on the final BAS and tax payment requirements. This may be in your favour HOWEVER if you are audited small errors could cause major issues i.e., extra payments, additional audits, fines, fees, and stress.
The question to ask: “Who will capture my data? Where will they get this information? How often will it be captured?”

Generally speaking accountants charge more per hour than bookkeepers.
Accountants will often undercut the bookkeeper for the bookkeeping work as they save money by outsourcing their bookkeeping from overseas.
In the bigger picture, implementing ‘separation of church and state’ can save you and your business money and give you peace of mind.
Bookkeepers ensure there are no mistakes and the data is accurate. By the time it gets to your accountant your accountant is not needing to find or fix errors.

The questions to ask: “Are you outsourcing your bookkeeping? Where are they based? Do they understand the rules, regulations and requirements? What are your bookkeepers’ qualifications and experience?”

A good bookkeeper puts the data in place, ensures it is correct and you are compliant and is able to assist you in interpreting the data. They work closely with you giving you guidance on running your business successfully on a day-to-day basis

Accountants are trained in accounting with the main point of difference being that accounting is high level. Accountants work WITH the data that is already there. With this data they are able to interpret the results, claim correctly and use that data to assist you creating strategies for your business.
The question to ask: “Who will be engaging with me on a regular basis to interpret and utilise the data effectively in my business?”

If your accountant is suggesting that you move your bookkeeping in house the first port of call should be to your bookkeeper to talk about their concerns and get their feedback.

In closing, having ‘separation of church and state’ by having a separate bookkeeper and accountant allows them to each do what they are trained to do, what they are good at and what they enjoy.

Having a good bookkeeper and good accountant they will always be willing to work with one another.

The net result of ‘separation of church and state’ you will have peace of mind!

Engaging with a bookkeeper and accountant who are willing to work together will ensure that you have a great bookkeeper and great accountant that you can lean on whenever you need them.

Having worked hand in hand with many accountants over the years, I would love to chat to you to see how I can work with your accountant.

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