Everyone wants to save fees. Professional accountants take responsibility for the accounts they produce. When they get accounts that have been prepared in a package (such as Moneyworks, MYOB, Reckon, Xero and the like) they do not just take that and file your taxes. They ensure the results are reasonably accurate (and tax compliant) before adding adjustments such as depreciation, FBT, owner salaries, taxes, etc.
 

All too often clients' systems require fixing. It may be that several items bought were used in the completion of an asset - so we have to move it from expenses to assets. Or an asset may have been capitalised when it cost less than $1000 and so can be expensed. Or it may be that it is a mixed-use asset - partly private and partly business - which may involve adjustments (including GST). And that's just assets.

 

There are common errors in every area. They primarily check for items that "look" strange (e.g. gross profit rate drops by half), or items that don't agree with other parts of IRD (e.g. GST) or third parties (e.g. banks). That way they ensure accounts are at least consistent. Still, as they say, if something can go wrong it will, and if it can't go wrong, it still will 😄.

 

A fixed monthly fee can be a great deal - or it can be an expensive option. It can be tricky to compare options, but as long as it isn't too expensive, or subject to too many extra costs, generally, that is safer.

 

A key part of the process should be a joint review (preferably using remote software) of your accounting system. That way mistakes can be fixed BEFORE the accountant starts working on your data. Two-way communication at this stage is very effective,

 

A second review is held when the accounts are in draft form. This is a chance to see that everything makes sense from your perspective. There's no such thing as a silly question - except one not asked.

 

So what basic things avoid needless costs?

 

The first and most obvious way to reduce your fees is to keep things simple. Key to this is the KISS principle - and minimising complications suits us. Simple accounting is easier to do and understand, and when errors do creep in, they cause less trouble when things have been kept simple. Of course, what seems simple to untrained people is often a source of problems when it is not as simple as first seems to be the case.

As a bare minimum, ALL income must be banked into a business bank account, and all expenses paid from that account. Of course, you can use other accounts to earn interest on surplus funds, put money aside for various taxes, pay by credit card, etc., but you must not mix business and private accounts.

ALL payments and deposits must show the other party and what the transaction was for.

Loan, H/P and other financial transactions and information must be provided to your accountant.

 

You still need to keep business records for several years - often banking information is available for months rather than years. You should save copies of electronic statements - probably monthly.

 

Technology means anyone can do their accounts in a modern computer-based accounting system. As Tui says, Yeah right!!! You don't need to be a qualified accountant to operate an accounting system, but you do need someone to ensure your system is set up and operated to produce correct results.