Bookkeeping Best Practices. The presenters. Learning objectives. Benefits of hiring a bookkeeper and pros and cons of bookkeeping software

Transcription

1 Bookkeeping Best Practices Benefits of hiring a bookkeeper and pros and cons of bookkeeping software Presented by: Deanna Lancaster Senior Manager Matthew Moran, CPA, CA Manager CAOT Management Mondays Webinar in collaboration with BDO CANADA LLP January 19, 2015 The presenters Deanna Lancaster Senior Manager Tel: x8533 Fax : dlancaster@bdo.ca Matthew Moran, CPA, CA Manager Tel: x8565 Fax : mmoran@bdo.ca Deanna is a senior manager with 13 years experience and is responsible for growing, managing and supervising our new bookkeeping and outsourcing service line for the Ontario Lakelands Region. She specializes in both small and medium sized owner/manager enterprises. Matthew is a Manager in BDO Canada s Audit and Assurance practice, with over 8 years experience. A large percentage of the clients Matthew serves are both small and medium sized owner/manager enterprises. He is a member of the Ontario Lakeland Region s bookkeeping and outsourcing taskforce. CAOT Management Mondays Webinar January 19, 2015 Slide 2 Learning objectives After taking part in this webinar, participants will understand: 1. The benefits of hiring a good bookkeeper 2. The pros and cons of accounting software 3. Segregation of duties and controls to help mitigate fraud in the workplace CAOT Management Mondays Webinar January 19, 2015 Slide 3 1

2 Why are these topics relevant for occupational therapists? Better utilization of time Better utilization of resources Optimization of bookkeepers Late filing deadlines and penalties Slide 4 What is a bookkeeper? Responsibilities Day-to-day processing Paying bills and generating invoices Reconciling bank accounts Ability to provide monthly/quarterly reports Payroll Preparing and submitting HST and other government remittances Slide 5 Benefits of hiring a bookkeeper Attributes Improved time management Knowledge of filing deadlines (HST, income tax, WSIB, payroll remittances, etc) Up to date on latest tax and payroll changes Knowledgeable about accounting software Likely faster turnaround for month and year ends Better able to track performance throughout the year Slide 6 2

3 Pros and cons of using accounting software Manual Dreaded shoebox no idea of where you stand during the year Manually recording transactions on paper capturing everything Is your bank balanced are you overdrawn on your account Can you meet payroll this month? Can you remit source deductions on time? Can you pay your tax instalments? Slide 7 Pros and cons - continued Boxed software incorrectly used Misuse of asset/liability/revenue/expense accounts Lack of knowledge on balancing of bank accounts in software package Booking transactions in the wrong accounting periods Lack of knowledge on how to read and extract software ready reports Slide 8 Garbage in = garbage out Slide 9 3

4 Pros and cons - continued Benefits of software Extract great usable reports throughout the year Make educated and timely decisions Ensure remittances are accurate when made to CRA Ensure posting of transactions are done in correct accounting periods Capital assets can be set up and amortized correctly upon purchase Slide 10 Accounting software Types Microsoft Dynamics NAV Quickbooks Sage (Simply Accounting) Freshbooks Characteristics of good accounting software Reports which compare periods Inability to record transactions into previously closed accounting periods Cloud based and easily accessible Slide 11 Cloud bookkeeping The wave of the future! Similar to electronic banking Ability to access accounting information and reports in real time Accessible anywhere you have a computer and the internet Moving to phones and tablets Slide 12 4

5 Bookkeeping options Full time / split duties (Office manager/bookkeeper) Based on a salaried wage $25,000 to $30,000 salary plus CPP/EI at least Cons Replacement issues (vacation, maternity leave, illness) Segregation of duty issues Time management issues Pros Availability of information Slide 13 Bookkeeping options External bookkeeper Based on an hourly rate or flat monthly fee $40 an hour to $300 per month Cons Not on-site every day Pros Possibility of segregation of duties More efficient use of time More experienced bookkeepers Not paying for time off (vacation, maternity leave, illness) Slide 14 Hiring a good bookkeeper Whether you choose to hire an internal or external bookkeeper you should do your due diligence! Considerations: Accounting software knowledge Scope of services provided Obtain references Communication is always key in accurate record keeping Find out when they provide a package to the accountant at yearend, how many journal entries are then prepared for the financial statements Test them! Slide 15 5

6 Common issues 1. Segregation of duties Cash is king Cash disbursements Your bookkeeper should never have signing authority on your bank account no matter how much time it saves you in the long run Slide 16 Common issues 1. Segregation of duties Cash is king Cash receipts Conflicting roles Cash receipt Recording cash received Depositing cash Slide 17 Common issues 2. Lack of journal entries Some bookkeepers prepare the accounting records on a cash basis Common journal entries missed include: Amortization Prepaids Accruals Receivables Prior year s entries Slide 18 6

7 Controls Examples of common controls 1. You should always be the one to open your bank statements or view online (on a regular basis) 2. Bookkeeper would prepare the cheques for expense payments but not sign the cheques 3. You should review monthly bank reconciliations 4. When signing cheques you need to review the payable invoices in detail at the same time 5. Have one staff receive cash payments, another prepare deposits and take to bank (this could be yourself) and bookkeeper records 6. Payroll wage rates, hours and weekly amounts need to be approved by therapist not bookkeeper each pay period Slide 19 In summary Hire a qualified bookkeeper Proper accounting software Segregation of duties Implementing controls Slide 20 Q & A 15 min. Slide 21 7

8 BDO CANADA LLP Slide 22 A message from CAOT In an effort to continue to improve our webinars, registrants will receive an with a link to a feedback form. We d greatly appreciate any feedback you can provide. Registrants will receive a certificate of attendance by with the feedback form, which may be completed with their name in order to attest their participation in this webinar and to keep for their records. *Only those that have registered for this webinar should complete the certificate of attendance. Slide 23 8