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What is an Accounts Health Check!

When we commence working with a new client, our first task is to complete a detailed Accounts Health Check. At Perth Bookkeeping Processionals we take great pride in ensuring your business accounts are looking good, so you get the health benefits of great profits. Here is an outline of the things we cover in an Accounts Health Check:

Data file dates

There are certain dates in your data file that we will check off first. At the end of the year once your tax or audit has been complete there will often be adjusting journals to be entered. We will check that these journals have been entered and reconciled to the correct Financial Reporting figures (from your accountant), if necessary. We will also check what period your data file is currently sitting in and take note if a year end roll-over needs to be complete, for both financial data and payroll data.

Accounts structure

The structure of your Chart of Accounts is important for meaningful reporting. We will go through your Chart of Accounts to ensure you have header accounts set up and that the account codes are in a structure that makes sense for the reporting specific to your business and your reporting needs. We will make recommendations where we see improvements could be made.

Bank Accounts

Regular reconciliation of your business bank accounts, credit cards and loan accounts are vital to the health of any business. By reconciling your business accounts regularly, you can decrease the chances of documents being misplaced before reconciling and it also detects potentially fraudulent entries early. Once your bank / credit card account is reconciled to your statement you can review the un-presented items on your bank reconciliation report, so you can investigate any long outstanding transactions or unusual items that you know have occurred. Some of these transactions may even be duplicates.

Asset Accounts

Reviewing your asset accounts will show any processing issues and balance discrepancies to do with things like Inventory, Fixed Assets, Motor Vehicles and the associated depreciation entries. Having incorrect balances in your asset accounts can give you a very distorted view of your business health. We will ensure items to these accounts have been processed correctly, with the correct tax codes, and will pick up any low value items that could potentially be fully depreciated for when your accountant prepares your year end tax.
Trade Debtors should be reconciled between the general ledger account and the Aged Receivables reports. We will identify any debtors that should urgently be addressed, and collection procedures put in place. We can then made recommendations on systems to ensure your customers pay promptly, so your business cashflow remains healthy.

Liability Accounts

We have already touched on Credit Cards and Loan accounts. We will also look closely at your fixed asset or motor vehicles loans or leases, ensuring they have been processed correctly with the correct interest and correct tax codes. We will ensure that your Creditors general ledger account reconciles with your Aged Payables, if it doesn’t we will check to find what has been processed incorrectly. A common error it is adjusting this account at year end from accountant’s tax figures.

Payroll

Ensuring all your payroll accounts reconcile will tell if you are calculating all your liabilities correctly and if your payroll system is set up correctly. We will pick up any outstanding superannuation or PAYG payments to be made and ensure all transactions have been processed to the correct accounts so the information you are working with is telling you the right story about your payroll costs and liabilities.

With Single Touch Payroll being compulsory for all businesses as of 1 July 2019 it is important to have all your payroll accounts set up and reconciled correctly, not to mention if they are not reconciling it could be costing you money in interest fees and penalties on late payments.

GST & IAS

There is more to the process of lodging a BAS than most business owners think. We will pick up if the amounts lodged in your BAS is the same as what is reported on the balance sheet, and that it reconciles to your ATO account. We also check that the payment of your BAS and IAS has been processed correctly so that you have the correctly GST and Income Tax Liability (or Asset) figures.

For more information on how an Accounts Health Check could assist your business please get in touch and make a time to speak with one of our highly qualified bookkeepers who can step you though the process and get your Health Check Booked in.