When starting a business, business owners need to estimate what the turnover is going to be, and weather they need to register for GST. Without going into to much technical detail, buisnesses basically need to ne registered for GST if their turnover exceeds $75,000 per year.
An extremely common error I see is that businesses wait until they have been trading for a few months before they decide to register for GST. They then register for GST and forget to (or are not allowed to) backdate the GST registration to the date they first started incurring expenditure.
Businesses can only claim GST from the start date of their GST registration. This effectively means that they cannot claim the GST on all the expenses they have incurred in setting up the business if they have made this error.
This can be a very costly error.
Shane Holbeck
www.accountix.com.au
Tuesday, October 5, 2010
Saturday, October 2, 2010
Bank Reconciliations
Each month businesses should reconcile their bank and credit card statements back to their accounting systems.
Where many businesses go wrong is they do their bank reconciliations in their accounting packages, but never actually check the reconciliation printouts to verify they make logical sense. It is a common occurance for me to look at MYOB bank reconciliations performed by other bookkeepers and discover reconciling items that just shouldn't be there.
The most common incorrect items are unpresented EFT's for purchases made. Common sense dictates that these should appear on bank statements on the day the transfer happens, and should not be appearing on bank reconciliations at all. It is a common occurance to find EFT's made for purchases, that have been listed as outstanding on bank reconciliations for several years. There is definately something wrong with the accounting data if this is the case.
There are legitimate reconciling items that should appear on bank recs e.g. unpresented cheques written before the month end, not presented to a later date. Credit card purchases in the week leading up to month end is another common legitimate reconciling item.
At Accountix, we do our bank reconciliations manually in a spreadsheet template first before reconciling MYOB. Using this method highlights potential problems errors before we start ticking and unticking reconciling items in MYOB. We also train clients and their staff to manually reconcile. Manual reconciliations become very easy once the theory is understood.
Shane Holbeck
www.accountix.com.au
Where many businesses go wrong is they do their bank reconciliations in their accounting packages, but never actually check the reconciliation printouts to verify they make logical sense. It is a common occurance for me to look at MYOB bank reconciliations performed by other bookkeepers and discover reconciling items that just shouldn't be there.
The most common incorrect items are unpresented EFT's for purchases made. Common sense dictates that these should appear on bank statements on the day the transfer happens, and should not be appearing on bank reconciliations at all. It is a common occurance to find EFT's made for purchases, that have been listed as outstanding on bank reconciliations for several years. There is definately something wrong with the accounting data if this is the case.
There are legitimate reconciling items that should appear on bank recs e.g. unpresented cheques written before the month end, not presented to a later date. Credit card purchases in the week leading up to month end is another common legitimate reconciling item.
At Accountix, we do our bank reconciliations manually in a spreadsheet template first before reconciling MYOB. Using this method highlights potential problems errors before we start ticking and unticking reconciling items in MYOB. We also train clients and their staff to manually reconcile. Manual reconciliations become very easy once the theory is understood.
Shane Holbeck
www.accountix.com.au
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