I am a self employed bookkeeper and I am working through my first clients books. I have posted all invoices and receipts from the paperwork and I am know trying to match every payment received and payment made against his bank statements.
My question is do I need to do this or is it acceptable to either work just from bank statement or just the paperwork, do I need to check every invoice and receipt against bank statement? He is not VAT registered. It seems that not all payments have been made from the same account and some monies received have been paid in with other payments making it difficult to identify each invoice.
Hi, on a similar note, what would happen if your client has given you a written list of sales income on a piece of paper, can you take their word for it? would you have to check that every payment did go to the bank a/c?
I am just wondering as this is what I have been given!
I suppose the answer to this, Lor, is that you can only go with what you have been given. If the client doesn't want you to do the bank rec, can you really demand to?
After all, I suppose how they present it isn't that important. If they give you invoices how do you know they didn't just knock them up on their computer at home.
At the end of the year they'll submit a tax return and need to sign it to say it's truthful. At the end of the day, they carry the can if there's foul play. You can only report what you know.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
In my view a bank rec is a must. There may be many bank accounts being used and some personal spend on them but you need to reconcile this. You need the sales and purchase invoices & cheque and pay in books & the bank statements. You should tie all these together. Plus anything else you can get, this could be just from talking to the client, get to know them and their business as much as you can. This will also help you to sell more services to them.
If you do this then you'll be able to see any holes in the accounts from all the information available, then question these. Once these are sorted you can state that the books have been prepared accurately to the best of your knowledge. You can't just take what you're given and bash it into the software, hand it over to the client and take the view that it's their problem as they sign the accounts / tax return. You must demonstrate that you have prepared the books to the highest standard or you could end up with a professional indemnity claim.
I understand what you are asying. But you can only do what the client is willing to pay for. The aleternative is to just turn the client down, and it's not everyone who can afford to do that.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
I understand both of you Kris and Orange but I do also feel that bank recs are essential. There may be business purchases which you haven't been notified of that you will see in bank statements. I can't understand why any client wouldn't want you to do the bank rec as this could mean them paying more tax due to my point above.
