Books Onsite

Bookkeeping Services with BooksOnSite Book Keeping in Sydney, Melbourne and Brisbane

You are here: Home / Archives for Tim Johnston

Comparing LEAP vs Actionstep- Xero Integration

by

Let’s face it- most lawyers aren’t really that interested in the way Actionstep and LEAP integrate with Xero. As long as their trust account is all taken care of, they are not really worried about how the information is transferred to their Practice Accounts- that’s for the bookkeeper to worry about!

That’s fine if the firm has a strong Legal Bookkeeper but if not then the Practice Manager or Principal should understand the integration to ensure they are producing accurate management and BAS reports.

The way both LEAP and Actionstep “talks” to Xero is quite different and both have their advantages and disadvantages as outlined below:

Nature of Integration

LEAP- You need to select your method of integration based on your GST registration of either cash or accrual. You can also integrate on a “Hybrid” basis which allows you to run management reports on an accrual basis while still lodging your BAS on a cash basis. Changing between the accounting basis is problematic and requires the engagement of LEAP Consultant.

The integration works using General Journals which creates a messy ledger which can make reconciliations difficult if it gets out of balance. The hybrid integration actually creates a separate GST code that does not get picked up on the BAS reports until the invoice is paid where it reverses the original transaction and re-posts the journal with the correct GST codes.

Actionstep- The invoices and payments for both sales and purchases are replicated in Xero so there is no need for journals. This creates a much cleaner integration and allows you to run cash or accrual management or BAS reports at any time.

Xero has a brilliant bank feed function, however it can sometimes be too clever for its own good. As the invoices have been exported from Actionstep to Xero, when Xero picks up a receipt for the same amount as an outstanding invoice it tries to match it automatically to the outstanding invoice in Xero. If this is matched in the Xero bank rec before it is entered in Actionstep it will not allow you to enter the receipt in Actionstep as it will think that invoice has already been paid. This can be difficult to identify for inexperienced Xero users.

Winner- Actionstep

Credit Notes

LEAP- Credit notes export to Xero as a journal. This works quite seamlessly although their is an ongoing issue with the GST coding on credit notes so the journal needs to be manually adjusted either prior to export or in Xero.

Actionstep- Credit notes in Actionstep are applied to invoices via a payment of $0 so that the credit note can be matched up to the correct invoice. Xero can’t handle a $0 payment so it creates credit note and a payment for the value of the credit note. The payment needs to be deleted via “remove & redo” and the credit note need to be applied against the invoice in Xero.

Winner- both problematic but the LEAP solution is probably easier to handle in Xero

Debtors and Creditors Reports

LEAP- all debtors and creditors reports need to be rune from LEAP as they are only sent ot Xero in journals

Actionstep- all debtors and creditors reports can be run from either Actionstep or Xero

Winner- Actionstep

Summary

Both LEAP and Actionstep work on a one-way integration, meaning that any changes to Debtors or Income in Xero will not flow back to the Practice Management system. This means that your Legal bookkeeper should have a high level of accounting knowledge to ensure the integrity of the 2 systems.

Overall Winner– you would have to say that Actionstep has the more comprehensive and versatile integration but you need to have a better understanding of Xero if things go pear-shaped.

Our Reader Score
[Total: 1 Average: 5]

7 Ways a Professional Bookkeeper will save you $$$ (Part 1)

by

Some small and medium business (SME) owners try to do their own accounts or they may employee a bookkeeper directly. This can be fine if you are lucky enough to recruit a good bookkeeper directly, however unless you have an accounting background and a thorough understanding of the accounting software involved, it can be difficult to know what questions to ask at the interview process.

Even if you find someone who looks good on paper, unless you know what reports to ask for it can take months to pick up if they are performing or not. Over 50% of clients that come to us have had a bad experience trying to employ a bookkeeper directly. Usually within the first week we uncover things such as:

  • Double payment of creditors invoices
  • Under-billing of revenue
  • Incorrect GST coding usually resulting in under-claiming GST Credits
  • Miscalculation of superannuation and payroll tax of employees and contractors

These mistakes can be very costly and sometimes terminal for some businesses.

Here’s 7 ways a professional onsite bookkeeper will save you money:

1. Help you work “on your business, not in your business!”

I know, it’s an old chestnut from that fantastic book E-Myth and which forms the cornerstone to most business coaching strategies. It is the key to being able to grow any business and applies to bookkeeping as with any other part of your business. If you employ a bookkeeper, you still have to monitor the quality of their work, when they work, when they take holidays, etc.

By outsourcing all of your accounting and bookkeeping functions to a professional bookkeeper, all of your accounts duties become their responsibility and you can focus on growing your business, with the confidence that you are receiving accurate reports on your performance and meeting all statutory obligations.

2. An onsite bookkeeper gets to know your business

There are some bookkeeping services that offer to take care of your accounts from their office which could be based anywhere in Australia or as far away as India. This involves transferring source documents either electronically or physically back and forth from your office to theirs. While this can be fine for micro businesses, it can prove difficult once your business begins to grow.

Before you can provide meaningful management reports, you need to know how a business operates and what are it’s key performance indicators. The only way to achieve this effectively is to get to know the company and the people who work within the company. This can only be done by performing the bookkeeping functions at the clients premises.

3. There’s “bookkeepers” and then there’s “bookkeepers!”

There can be a huge difference in skill level of people that call themselves bookkeepers. Just as an apprentice “chippie” and his boss with 30 years construction experience may both call themselves “builders,” people representing themselves as bookkeepers can range from data entry clerks through to qualified management accountants.

A professional bookkeeping firm should be accredited in the accounting software used by your company and they should have qualified accountants to support their bookkeepers to enable them to provide a management accounting level of service. In part 2 of this blog I’ll look at a couple of more specific ways a professional bookkeeper can save you $$$.

Originally posted on our old blog, this Article has been updated on the 13/04/2017.

Our Reader Score
[Total: 4 Average: 4.3]

Difference Between Assets and Income Accounts

by

When any business begins the process of bookkeeping it is important to understand how to establish the records as well as what the different types of accounts mean. A balance sheet is laid out to track several different accounts and includes: assets, liabilities, owner’s equity, income, and expenses. Two accounts that typically cause a bit of confusion are the assets accounts and the income accounts. In order to help you understand how the two differ, it is first important to understand the definition of each. [Read more…] about Difference Between Assets and Income Accounts

Our Reader Score
[Total: 3 Average: 3.7]

Benefits of Double Entry Bookkeeping

by

There are two main systems used by businesses when discussing bookkeeping:  single entry and double entry.  While both systems are quite adequate, choosing which one to use in your business is for the most part, up to personal preference.  That being said, unless your business is small, and only handles simple transactions, double entry bookkeeping will provide the most benefit.

Single entry bookkeeping is much like a register on your statement, where only single transactions are recorded in the form of a cash debit or credit.  Keeping the books in this manner is less time consuming, and less expensive.  However, single entry bookkeeping only makes a record of cash, accounts receivable, accounts payable, and taxes.  More in depth transactions are not recorded, which could lead to only a partial accounting of your finances.

Double entry bookkeeping makes use of generally accepted accounting principles (GAAP), and is a bit more involved.  Rather than having just one transaction in a column, there are two entries.  A credit entry is made for all income, and a debit entry is made for each expense.  These two entries will offset each other so that both sides tally to zero.

Double entry bookkeeping therefore provides the following advantages over single entry bookkeeping:

  • It provides verification that errors have not been made, including a check that there has been no theft, when all transactions are properly recorded.
  • Financial statements can be prepared easily because of the accurate calculations that figure profits and losses, When both entries are made, the company can easily pinpoint areas where money is owed, or who owes the company money.
  • The company can easily view their financial standing, and can more simply prepare for the future.
  • There are more required entries, double entry bookkeeping creates detailed records of all assets within the company, so that income is never overlooked.
  • Double entry bookkeeping also tracks internal transactions, which helps to provide more detailed information for reporting at the end of the fiscal period.

There is never the problem of omitting data that is important because every transaction is logged twice, in separate areas. As you can see, there are a number of key benefits to utilising the double entry bookkeeping system.  Just about every type of business in every industry can make use of this method, and yield exceptional results.

*Article originally posted in our old bookkeeping blog.

Our Reader Score
[Total: 1 Average: 5]

Are BAS Agents Business Saviours?

by

Will Cowie from Inspire Education talks about the benefits of engaging a Registered BAS Agent.. A friend of mine got fined by the Australian Tax Office. He ran a small computer store in the suburbs servicing his local community, but his story applies equally to any small business owner. To save money, he used to do keep his own books and prepare his own Business Activity Statements (BAS). Unfortunately, while he was great with computers, bookkeeping wasn’t one of his strengths. He made errors, underreported his tax obligations and ended up with a fine on top of his outstanding tax obligations. It took years to pay off and added an extra layer of financial stress on top of the normal trials of small business ownership. After being hit with that fine, he hired a bookkeeper who was registered as a BAS agent. The agent took over nearly all the recording and reporting tasks for the business. It freed my friend up from hours work each week; work that he hated doing. That was time he could use to improve his business, bill more hours, or simply go home and enjoy his Friday evenings with his family. If you think hiring a bookkeeper and BAS agent is expensive, consider the alternatives. It just might be a great investment in your business and your peace of mind! What is a BAS Agent? A registered BAS agent is an individual, partnership business or company that can provide BAS-related services like BAS preparation and lodgement or advice about BAS laws. They must meet strict training, experience and professional standards set out by the Tax Practitioners Board. If a bookkeeper is providing BAS services for a fee or other reward, then they need to be registered as a BAS agent. “BAS agents” were created as part of the Tax Agent Services Act 2009 and were first introduced in 2010. Before that time, only Tax Agents were supposed to do BAS, but many bookkeepers started to offer the service anyway. The problem is they weren’t always qualified or experienced enough, leading to a lot of costly mistakes! Clients like you got burnt, the bookkeeper was likely sued and everyone lost out. What Does BAS Agent Registration Represent? Today, bookkeepers doing BAS must be suitably qualified and registered as a BAS Agent. They need to have:

  •  A recognised and approved qualification like the Certificate IV in Bookkeeping (or an equivalent or higher level bookkeeping/accounting course).
  • Completed at least 1,400 hours of relevant work experience in the last 3 years.
  • Completed approved courses in GST and BAS principles.
  • Passed a “fit and proper person” test.
  • Professional indemnity insurance that offers you, the client, financial protection.

BAS agents must also abide by a strict code of professional conduct and can lose their registration if they don’t. They also need to keep up with ongoing education and professional development, ensuring they keep their skills up to date. Ultimately, this means you can hire a BAS agent and be confident in their skill and ability to prepare your BAS correctly. What are the Benefits of Hiring a BAS Agent? BAS agents are trained, practiced professionals. As with anything in life, practice makes perfect. Your agent will almost certainly be able to prepare your statements faster than you could, and more accurately too. Their job is to know the laws relating to GST, PAYG and other taxes reported in BAS so they can get the maximum benefits for you too. If you haven’t been keeping up to date with your reporting or tax payments (and sometimes businesses do fall behind) hiring a BAS agent is an excellent move. They can help sort out your finances and it sends a strong message to the Australian Tax Office that you’re taking the problem seriously and will do better in future. It can be a big help if you’re negotiating with the ATO and paying off fines and outstanding debts. Another major benefit BAS agents offer is an extended lodgement period. Agents can have up to 28 extra days to prepare and lodge your BAS documents on your behalf. That means you have more time to collect your information and find cash to pay a tax bill. Finally, BAS agents almost always start out as bookkeepers and most continue to offer bookkeeping services too. They can help you set up quality financial recording and reporting systems in your business; or refine and make your current systems more efficient. Why Not Hire a BAS Agent Today? Rather than wait until it’s too late, hire a BAS-certified bookkeeper today. Once you’ve got bookkeeping systems in place, recording transactions and tracking GST will be much easier. Good data can actually help you keep more money in your pocket! You’ll know exactly what you owe and your BAS agent can use that data to maximise your BAS. You’ll be able to sleep easy at night knowing your BAS are taken care of, plus you’ll have more free time in your year to spend how you choose. William Cowie is a content production specialist for Inspire Education, one of Australia’s leading vocational education organisations. Inspire provides Bookkeeping, BAS, Health and Safety, and Training and Assessment courses.

Our Reader Score
[Total: 1 Average: 5]

To discuss your onsite bookkeeping needs, call us on 1300 2BOOKS Sydney ::: Melbourne ::: Brisbane ::: Perth Contact Us Today.