Documentation – why we ask for it
We have been asked many times if we really need the information we ask for – such as bank statements, copies of invoices, etc. The answer is always … yes. Yes, we do. But why?
There are a number of reasons why we need copies of documentation:
- Verification: We need to verify what was purchased and whether or not it can be deductible to the business or needs to be processed as personal expenditure. Such as Kmart – there is clothing, stationery, kitchenware etc. Without seeing a receipt, we can’t confidently explain the expense is for business – maybe someone bought their favourite undies!
- Confirmation of GST: We need to confirm the GST amount. Not all food, beverages or services have GST on them. Some suppliers aren’t registered for GST, some have GST that apply to a portion of the charges. The hospitality industry, insurances, education providers – all examples where GST is not a linear 1/11th of the total price paid.
- Reconciliation: We need to reconcile the software bank accounts with the actual bank statements. Too many times have the software that import bank feeds missed transactions. While they are helpful, they are not perfect.
- Compliance: We need to comply with the various industry bodies and maintain our internal workpapers and procedures. If an audit is performed by the Tax Office or professional body, we need to show that we have operated with integrity and due diligence in preparation of client accounts – especially those that are lodged with the Tax Office.
At the end of the day, the client is responsible for maintaining their records. However, engaging us as your bookkeeper / registered agent will reduce some of the stress as we will help set up a system for you to provide the information in a digital format that will comply with the regulations and make it easier for us to obtain the information we need to ensure we are processing your accounts accurately.
If you aren’t excited by the notion of digital document storage, you are welcome to send us your paperwork, but this does result in work taking longer, therefore costing more.