Index
• A •
AAT Australia, 18
ABNs
applying for, 93
defined, 367
lookup service, 111
verifying, 111
accessing accounts remotely, 75
accident compensation (ACC), 166, 173
non-resident employees, 173
what it is, 216
account classifications, 37, 367
account types, 37
accountants
communicating with, 308, 309, 313
accounting cycle, 8
accounting equation, 40–43, 367
accounting fees, 26
accounting software
access restrictions, 90
archiving data, 69
developing skills in, 322
double-entry bookkeeping, 50–51
incremental installation, 87
inventory, 224
opening balances, 292
pros and cons, 73
versus spreadsheets, 79
AccountRight. See MYOB
accounts
choosing, 134–136, 145, 152–154
customising, 85
accounts list. See chart of accounts
accounts payable. See also Aged Payables report
accounts receivable. See also Aged Receivables report
debiting, 47
keeping tidy, 269
accrual accounting
matching principle, 255
accruals
defined, 367
future expenses, 254
reversing, 256
versus provisions, 254
accumulated depreciation, 33, 367
activity statements. See Business Activity Statements
adjustment notes. See credit notes
adjustments. See also general journals
for personal expenses, 108
advice, understanding legal limits of, 344
Aged Payables report
reconciling, 279
understanding, 129
Aged Receivables report
reconciling, 279
allocation accounts
for income, 145
allocation errors, spotting, 282
allowances for employees, 171, 176, 180
alternative holidays, 181
annual withholding declaration, 218, 368
apportioning personal expenses, 107, 137
assets. See also capital acquisitions
debiting, 41
defined, 23, 32, 33, 231, 291, 368
historical cost, 291
reconciling against schedules, 241
recording purchase of, 232
recordkeeping for, 242
use of personal assets, 235
useful life of, 236
Association of Payroll Specialists, 175
associations for bookkeepers, 17, 18, 171, 330, 331
ATO online portal, 62, 210, 218
audit trail tracking, 283
audits
techniques for, 290
AUSkey, registering for, 218
Australian Bookkeepers Network, 18, 330, 336
Australian Business Number. See ABNs
authorisation procedures, 132, 133, 356
average cost (inventory), 227
average daily pay, 181
average weekly earnings, 180, 368
awards (for employees)
defined, 368
• B •
backing up
archiving data, 315
client data, 347
devising a strategy, 89
what data to copy, 89
bad debts, 158
Balance Sheets
checking, 356
reconciling against accountant’s, 310
what accounts to include, 31–36
why they always balance, 43
bank accounts
debiting and crediting, 45
bank feeds
accuracy of, 194
defined, 368
error rates, 116
for credit card transactions, 130, 133
for micro businesses, 119
guarding against inaccuracies, 196
reconciling accounts using, 191, 193–194
reducing data entry, 8, 75, 246
use in trust accounting, 358
bank fees
bank loans. See loans
bank reconciliations
by hand, 191
opening balances, 188
using accounting software, 190
what accounts to reconcile, 188, 199
when using bank feeds, 191, 196
bank rules, 75, 82, 120, 149, 368
BAS. See Business Activity Statement
BAS Agent registration
figuring out whether you need to, 334–335
fines for not registering, 334
importance of registration, 322
qualifications required, 17, 18, 335–336
using someone else’s, 336
what you’re not allowed to do, 344
BAS service, defined, 334, 368
BAS statements. See Business Activity Statements
batch files, supplier payments, 133
bookkeepers
defining responsibilities for, 165, 219, 243, 355
qualifications required, 15, 17–19
training courses, 18–19, 175, 222
typical profile of, 321
bookkeeping
associations, 17, 18, 171, 330, 331
calendars, 69
industry changes, 331
life cycle, 8
breaks (employees), 170
browser-based software, 73, 74–76, 78–81, 182, 199
budgets, 65, 84, 240, 287, 353
Business Activity Statements. See also GST
authority to prepare, 334
checking against Balance Sheet, 273–276
configuring tax codes for, 102–105
deadlines, 70
defined, 368
ensuring accuracy, 104
input-taxed transactions, 99
late lodgement, 60
locking data, 307
lodging online, 62
recording payment of, 273
reporting payroll on, 210
business plan, creating, 323
Buyer-Created Invoices, 110
• C •
Calxa, 353
capital acquisitions. See also assets
attaching receipts to transactions, 118
hire purchase, 249
reporting purchase of, 98
what tax code to use, 103
cash. See also petty cash
not banked, 144
not declaring, 160
payments made using, 271
cash disbursements ledger, 22, 121–123
cash-based accounting
adjusting for tax, 55
debits and credits, 53
versus accrual-basis, 126
when it works well, 52
cashbook balance, 188–189, 369
cashflow
casual employees, 176, 180, 181
categorising transactions, 21, 22–37
Certificate IV courses, 18, 322
Certificate of Earnings, 218
chart of accounts
importance of, 24
tax codes, 104
using templates, 36
checklists
inventory, 230
Tax Invoices, 109
child support, 204
clearing accounts, 199, 217, 266
clients, building your base, 327
cloud (the)
defined, 369
cloud accounting
accountants and, 308
archiving source documents, 116
backing up, 88
hybrid solutions, 79
internet outages, 76
mobile invoicing, 12
petty cash, 142
privacy concerns, 77
trends, 331
Code of Professional Conduct
acting honestly, 337
acting lawfully, 338
applying tax laws correctly, 344
competent services, 341
complying with tax laws, 337
confidentiality, 340
conflicts of interest, 338–340
definition of reasonable care, 343
ethical dilemmas, 160
professional development, 342
sharing information with third parties, 308
supervising others, 342
collective agreements, 221
companies
chart of accounts structure, 36
defined, 369
divisional reporting for, 30
formation expenses, 33
recordkeeping requirements, 68, 110
registering name of, 14
competent services, defined, 341
confidentiality, protecting, 340, 347
conflicts of interest, 338–340
contract bookkeeping. See starting your own bookkeeping business
control accounts, 276–281, 310, 369
controlled monies accounts, 358
cost centres
defined, 369
cost of sales, 23, 25, 288, 369
council rates, 106
courses for bookkeepers, 18–19, 175, 222
CPE requirements (for BAS Agents), 342
credit applications, 364
credit cards
customer payments using, 147
filing receipts, 66
reconciling accounts, 188, 199
recording transactions, 34, 130, 133
credit limits, 158
credit reference reports, 364
creditors. See accounts payable
credits. See debits and credits
CRM software, 83
customers
deposits from, 269
filing invoices, 66
opening balances, 86
sending statements, 363
• D •
data (accounting)
archiving, 315
copying, 308
data entry, automating, 120
dates
incorrect, 267
setting a closing date, 306
starting accounting software, 85, 86
supplier payments, 129
deadlines
fringe benefits, 69
superannuation, 63–64, 69, 70, 211
debits and credits. See also double-entry bookkeeping
expenses, 47
general journals, 50
inventory, 47
sales transactions, 46–47, 151
debt collection
ACCC guidelines, 365
activity logs, 363
cost of debts, 361
protocols for, 364
statistics, 361
debtors. See accounts receivable
deductions
bookkeeping for, 174
child support, 204
employees, 174
salary packaging, 204
default funds for super, 168, 211, 370
deleting transactions, 129, 158, 160, 198
depreciation
adjusting on sale of asset, 230, 234–235
cut-off points, 231
diminishing value, 237
prime cost, 237
simplified rules, 231
desktop-based software, 73
detail accounts, 29
diminishing value depreciation, 236–238, 370
director’s loan accounts, 28, 153
disbursements ledger, 22, 121–123
discounts
fringe benefits, 212
GST, 156
prompt payment, 156
distributions, recording, 36
dividend income, 36, 153, 262–264
double-entry bookkeeping. See also debits and credits
sales, 46
dues and subscriptions, 27
Dun & Bradstreet, 361
• E •
earnings certificates, 64
EFTPOS transactions, 130, 133, 147
electronic document systems, 132
electronic payments, 67, 87, 132–133
emailing accounting data, 308
employee fraud, preventing, 172
employee pays
signing for, 12
employees. See also leave, wages
benefits, 213
deductions, 174
expense claims, 212
minimum pay, 219
pay slips, 185
Employer deductions form (IR345), 64
Employer monthly schedule (IR348), 64
employment agreements, 164, 183, 221–222
Employment Relations Act, 221
end-of-year
backing up, 315
engagement letters
defining your services, 344
definition of competence, 342
ICB template, 345
protecting yourself, 338
specifying limits of your advice, 346
writing one of your own, 345–346
entitlements (employees). See also leave
alternative holidays, 181
calculating in Australia, 178–179
checking, 170
journalling provisions for, 256–258
medical certificates, 171
recordkeeping, 182
relevant daily pay, 181
equity
equity accounts
companies, 36
partnerships, 35
sole traders, 35
estimated useful life, 236
exempt transactions, 100, 101, 104
expenses
debiting, 41
debits and credits, 47
matching to income, 55
versus expenditure, 288
• F •
Fair Work Information Statement, 164
file size limits, 308
files, attaching to transactions, 67
filing systems
bank statements, 116
invoices and receipts, 66–67, 117–118
financial statements. See also Balance Sheets, Profit & Loss reports
GST on figures, 287
reporting inventory, 226
Trading Statements, 226
fines, non-registration, 334
first in/first out, 227, 228, 370
floats, petty cash, 138
foreign currency, 83
fraud, preventing, 355
fringe benefits tax
limits of advice you can give, 344
future-dated transactions, 268
• G •
gain on sale of assets, 235
general journals
accruals, 254
defined, 371
end-of-year, 310
figuring out debits and credits, 50
income in advance, 260
prepayments, 253
repeating, 253
general ledger, 371
goals, setting for your business, 330
Goods and Service Tax. See GST
grant acquittal reporting, 355, 371
gross profit
GST
adjusting for personal spending, 106, 259
bad debts, 158
chattel mortgages, 252
common mistakes, 106
discounts, 156
double-entry bookkeeping, 48–49
financial reports, 287
how it works, 92
hybrid basis, 95
input-taxed sales, 99
late lodgement, 60
non-reportable transactions, 103
receipts journal, 144
reconciling liability accounts, 271, 273–276
refunds, 273
sale of assets, 234
transactions with no GST, 99–101, 102
zero-rated transactions, 100, 104
GST returns (New Zealand)
checking against Balance Sheet, 273–274
ensuring accuracy of, 104
filing online, 62
late lodgement, 61
locking data, 307
recording payment of, 273
• H •
hire purchase
recording a new debt, 35, 248–249
recording payments, 135, 250–251
historical cost, 240, 291, 371
hobby businesses, 13
holiday leave. See entitlements (employees)
Holidays Act, 221
hourly rates. See rates
• I •
ICB Bookkeepers’ Survey, 321, 325, 327
identifying point of difference, 329
importing goods
selecting accounts, 26
tax codes, 104
income
crediting, 41
dividends, 262
matching against expenses, 260–261, 355
Income & Expenditure report, 354, 371
industrial relations
industry trends, bookkeeping, 331
input-taxed
credits, 371
Instalment Activity Statement (IAS), 371
Institute of Certified Bookkeepers, 18, 330, 341
insurance
allocating claims, 153
employees, 164
GST on, 106
journalling prepayments, 253
professional indemnity, 17, 336
workers compensation, 64, 166–167, 214–215
interest expense
and GST, 99
journalling, 246
internal controls, 372
internet. See cloud accounting
Intuit. See QuickBooks Online
inventory
absorption costing, 227
accounting software features, 83
debits and credits, 47, 225–226
reconciling, 229–230, 277, 279–281
recording purchase of, 128, 136, 224–225
valuation methods, 224, 227–228
IR345 form, 209
IR348 form, 209
• J •
Jim’s Bookkeeping franchise, 328
job costing, 83
journal entries. See debits and credits, general journals
• K •
KiwiSaver. See also superannuation
creating accounts for, 27
deadlines, 71
employer contributions, 169, 209, 372
enrolment deadlines, 64
• L •
labour, charging for, 25
land tax, 106
larger businesses, bookkeeping for, 130
last cost (inventory), 227, 228, 372
last in/first out (LIFO), 227, 228, 372
leases
residuals, 251
stamp duy, 251
leave. See also entitlements
journalling leave provisions, 256–258
recordkeeping for, 183
legal framework, bookkeeping profession, 333–347
letter of demand, 365
letter of engagement. See engagement letters
letters for debt collection, 365
liabilities. See also loans
crediting, 41
current, 34
non-current, 34
understanding, 292
liable earnings, 217
loans
reconciling against statements, 188, 199, 246
recording interest, 246
recording payment of, 246
recording receipt of, 45, 153, 244–245
locking periods, 306
loss on sale of assets, 235
• M •
Macintosh computers
accounting software for, 79, 82
sending data to accountants from, 307
management reporting, 65, 123, 145
manufacturers
absorption costing, 227
chart of accounts, 25
choosing software for, 83
marketing your bookkeeping business, 323
matching principle, 55, 255, 372
medical certificates, 171
Medicare exemptions, 173
membership dues, 357
merchant fees, 26, 106, 107, 134
micro businesses, bookkeeping systems for, 9–10, 118
Minimum Wage Act, 221
miscellaneous accounts, 28, 288
miscellaneous expenses, 135
mistakes, spotting, 282
mobile invoicing, 12
motor vehicle expenses
apportioning, 259
fringe benefits, 213
insurance, 27
multi-user software, 75
myIR Secure Online, 62
MYOB software
end-of-year, 314
income analysis, 287
overview of product family, 78
payment gateway, 133
reconciling bank accounts, 193
reconciling super, 208
recording receipts, 152
starting a new year, 314
viewing debits and credits, 50
• N •
National Employment Standards, 220
NDIS scheme, 357
net profit, defined, 372
networking
to build business, 328
with other bookkeepers, 18, 352
new businesses, choosing software for, 82
new equipment, allocating, 135
non-current liabilities, 34, 372
non-profit organisations
accountability, 355
budgets, 353
chart of accounts, 31
choosing software for, 84
cost centre reporting, 352
journalling income in advance, 260
leave provisions, 258
membership dues, 357
payroll, 355
trust accounts, 357
non-registered suppliers, 107
non-reportable transactions, 103
non-taxable transactions, 100, 101
NZ Bookkeepers Association, 18, 330
• O •
office expense, reporting for, 27
online lodgement, 62, 210, 218
Opening Balance Clearing account, 190, 191
opening balances
accounting software, 292
payroll, 208
ordinary time earnings, 175, 373
overdrafts, 34
overheads. See expenses
overseas travel, 106, 107, 213
owner’s contributions, 153
owner’s equity, 35
• P •
partnerships
chart of accounts, 35
defined, 373
drawings, 28
passwords
on data archives, 315
permission levels, 90
protecting client data, 307, 347
retaining, 182
pay slips, 185
templates for, 186
what they have to include, 164, 185
PAYE tax
deadlines, 71
non-residents, 173
paying, 209
reconciling, 207–208, 217, 277
PAYG instalment tax
deadlines, 70
PAYG withholding annual report, 63
PAYG withholding tax
deadlines, 70
non-residents, 173
paying, 63, 205, 209, 210, 217, 273
reconciling, 205–208, 277, 281
payment summaries
payments-basis accounting, 51, 94
payroll
legal obligations, 14–15, 163–168
maintaining confidentiality, 90
reconciling liability accounts, 204–211, 277
payroll tax, 164, 204, 212, 213–214, 373
penalties
late GST lodgement, 60
late super payments, 211
non-registration as BAS Agent, 334
periodic method (inventory), 224, 226, 373
perpetual method (inventory), 224, 229, 373
personal assets, use of in business, 235
personal leave. See entitlements
personal spending
adjusting for GST, 100, 106, 107, 259
bookkeeping for, 28
separating, 68
sole traders, 35
tax code for, 102
petty cash
balancing, 140
different systems, 137
when there is no tin, 141
plant and equipment, 33
point of difference, 329
point-in-time backups, 88, 306
pooling method for depreciation, 233, 238–239
prepayments
allocating, 253
incorrect, 268
prime cost depreciation, 236, 237, 373
privacy
cloud accounting, 77
professional associations, 17, 18, 171, 330, 331
professional development, 342
professional indemnity insurance, 17, 336
Profit & Loss reports
accrual basis, 127
cash basis, 297
checking for errors, 283
comparing against last year, 297
formatting, 289
matching against accountant’s, 310
versus cashflow reports, 293–296
what accounts to include, 24–29
profitability, analysing, 29–31
prompt payment discounts, 156
protecting data, 88–90, 306, 346
provisions
depreciation, 240
for doubtful debts, 158
• Q •
qualifications for bookkeepers, 15, 17–19, 322, 335–336
quick ratio, 301
QuickBooks Online
account numbering, 37
income analysis, 287
reconciling bank accounts, 193
recording receipts, 152
• R •
rate of return, calculating, 327
rates (hourly)
deciding what to charge, 324–327
survey results, 325
ratios
acid test ratio, 301
stock turnover ratio, 300
reasonable care
definition of, 343
ensuring you meet standard of, 343–344
Receipt Bank, 118
receipts
attaching to transactions, 67, 118
cash payments, 141
filing, 117
recording, 146
Recipient Created Tax Invoices, 110
Reckon Accounts
accountant’s copy feature, 308
account numbering, 37
history of product, 80
Reckon One, 80
recognition for prior learning (RPL), 336
reconciling. See also bank reconciliations
accounts payable, 276
accounts receivable, 276
assets, 241
bank accounts, 13, 187–199, 266
end-of-year adjustments, 309–312
loans, 246
payroll liabilities, 204–208, 281
using spreadsheets, 194
wages, 217
when using bank feeds, 193–194
recordkeeping. See also filing systems
assets, 242
employee entitlements, 182–183
how long to keep records, 68, 182
retaining data, 89
timesheets, 171
refunds
from suppliers, 152
to customers, 157
registering as a business, 13–14
registering for GST, 14, 93–95
reminder letters, 362
remote access of accounts, 75
remote services, growth of, 331
repairs and maintenance, 135
reports. See also financial statements
Aged Receivables report, 269–271
bank reconciliations, 195, 267
Business Activity Statements, 246
general ledger detail, 282
Income & Expenditure report, 354
non-profit organisations, 354
Profit & Loss reports, 127, 285–289, 297
receivables reconciliation, 278
saving as PDFs, 66
Statement of Cashflow, 295
retailers
bookkeeping systems, 11
chart of accounts, 25
• S •
SAAS, 75
salary packaging, 204
sales. See also income
cash accounting, 297
debits and credits, 46
savings accounts, 199
SBR-enabled software, 218
scope of services, 343
security and cloud accounting, 77
separation of duties, 356
service businesses, 25
settlement discounts, 156
SGC charge, 204
sick leave. See entitlements
source documents
explained, 116
filing, 357
speed and cloud accounting, 76
spreadsheets
accrual accounting, 126
as a bookkeeping tool, 79, 123–125
protecting data, 306
receipts journal, 144
reconciling accounts, 194
wages calculations, 184
staff amenities, 135
stamp duty, 106
Standard Business reporting, 62
Standard choice form, 164, 168
starting a new year. See end-of-year
starting your own bookkeeping business
advantages of, 320
creating a business plan, 323
deciding what to charge, 324–327
disadvantages of, 320
identifying your point of difference, 329
looking for clients, 327
planning for the future, 331
qualifications required, 322
skills required, 322
Statement of Cashflow report, 295, 374
stock turnover ratio, 300, 374
subcontractors
payments to, 136
superannuation
calculating, 175
creating accounts for, 27
departed employees, 211
explained, 204
on BAS statements, 100
ordinary time earnings, 175
paying, 136, 168, 209, 210–211
penalties for late payment, 211
SGC charge, 374
Standard choice form, 164, 168
subscribing to a fund, 167
threshold, 167
Superannuation Guarantee Charge (SGC), 211, 374
supervising another bookkeeper’s work, 342
supplier accounts
authorising, 356
checking, 110
correcting, 129
managing, 132
opening balances, 86
reporting for, 129
suspense accounts, 288
• T •
tax (employees). See also PAYE, PAYG, payroll tax
declaration forms, 63, 64, 164, 165
rebates, 166
tax advice, what you can say, 344
Tax Agent Services Act, 334, 337
tax code declarations, 164, 165, 374
tax codes (for GST)
calculating GST, 123
linking to accounts, 104
tax file numbers, 166
Tax Invoices
checklist for what to include, 109
claiming GST, 107
Recipient Created, 110
requirements, 109
verifying, 111
tax payments
allocating, 136
on Profit & Loss reports, 294
tax planning, 314
Tax Practitioners Board, 337, 375
Taxable Payments report, 63, 70, 215–216
termination pay, 174, 176, 180, 183
third parties
monies held, 337
sending information to, 308
timesheets
checking, 172
recordkeeping, 171
tools, allocating purchase of, 136
trade creditors. See accounts payable
trade debtors. See accounts receivable
trading terms, 360
training courses. See courses
transactions
defined, 375
future-dated, 268
miscellaneous, 288
prepaid, 268
spotting errors, 282
travel
maintaining a diary, 213
trial balance, defined, 8, 375
true bank balance, defined, 195
trust accounting, 357
trusts, chart of accounts, 36
turnover threshold (for GST), 93
• U •
uncleared transactions
bank reconciliations, 189, 190
defined, 375
errors, 267
stale cheques, 266
Unearned Income account, 261
union fees, 204
unsubscribing from cloud software, 69, 89
upgrading, and cloud accounting, 75
• V •
• W •
wages. See also employees
allocating, 136
allowances, 171
bonuses, 176
calculating, 170
checking rates, 171
employee breaks, 170
fractions of hours, 171
leave loading, 176
minimum, 164
reconcililng, 217
recording correctly, 184
reporting for, 210
wholesalers, 83
Withholding declaration forms, 166
workers compensation insurance
deadlines, 64
superannuation on, 176
writing off
bad debts, 158
small amounts, 270
• X •
Xero
account classifications, 37
asset management features, 240
attaching receipts to transactions, 67, 118
backing up, 306
Bank Reconciliation Summary report, 194, 195
category tracking, 352
cost centre reporting, 30
General Ledger Exceptions report, 283
grouping accounts, 29
overview, 80
publishing reports, 306
reconciling terminology, 187, 193
unsubscribing, 89
• Y •
Yodlee service, 194
YouSendIt, 308