I think you’ll find that most of us involved in the Bookkeeping Industry  are well and truly aboard the cloud “train.” The cloud has many great benefits relating to scalability, access and security (although some also perceive this as a risk). One of the reasons that we have clients interested in taking their bookkeeping to the cloud is for the automation benefits derived from being able to setup an automatic bank feed from you bank and credit card accounts. There are definitely some time efficiencies to be achieved from this but just how much time depends on the size and type of business you are running and may not be a reason in itself for switching your bookkeeping on the cloud. The main benefits of bank feed automation are to gained if you are a small business with a small number of suppliers and customers and you have regular monthly transactions. The automatic bank feed can be setup to remember how these transactions were previously handled and therefore create the bank entry with general ledger coding based on the previous transaction. This can definitely save your bookkeeper an hour or two a week on data entry time. As the size of your business increases so too does the complexity of your transactions such as the following:

• Paying multiple supplier invoices and credit notes with one supplier
• Complex payroll to take account of leave and entitlements
• Customer deposits paying multiple invoices

The automated bank feed can still assist in matching these payments if they have already been entered however the automatic entry benefits may be reduced due to the manual input required. Bank Feeds are a great feature of cloud based software and are available with MYOB, XERO, QuickBooks and SAASU but may not be a reason in itself for choosing a particular software.

There’s been a couple of horrific examples of employee fraud over the past couple of years. I was blown away when I read details of the cases involving Clive Peeters Electrical and Hastie Engineering. I think they are worth considering further as the technique used by the employee involved was similar and both involved amounts over $20M!! There is a weak link within the Australian Banking system which allows you to pay someone by eft without the correct “Account Name.” In these cases supplier or wage payments were setup with the correct payee name but the bsb and account details were actually those of the fraudulent staff member.

Having 2 signatories will not pick this up unless the 2nd signatory independently checks the bank details of the payee. We recommend never using EFT payments. There is no need to as there are so many other secure methods of payment available these days with built in security utilised by bookkeeping software such as MYOB, QuickBooks and Xero.

While unreconciled bank accounts or suspense accounts are a red flag to an accountant, at a recent CPA conference a Scotland Yard Fraud Investigator talked about some more subjective warning signs to watch out for if you suspect employee fraud. Be wary if you have a staff member who never wants to take holidays or sick leave. Taking a holiday may mean that someone else will have to do their job while they are away and come across what they have been up to.

Another sign is that the staff member may show no interest in promotion or pay rises- they prefer to stay where they are. These are simplistic indicators and can obviously be quite innocent, but if there are other warning signs it may be worth digging a bit deeper. Outsourcing your accounts and bookkeeping to a member of a CPA Australia will ensure that you are covered up to a limit by their compulsory Professional Indemnity Insurance.