Outsourcing is a wonderful thing when handled in a controlled manner and we are strong advocates of the practice. But anything you delegate is subject to being done differently to how you would do it yourself. When it comes to your accounts, this can cause inconsistency and inaccuracies, and general headaches at year end time.
Twelve years of experience with business owners, bookkeepers and accountants has gone into creating SortMyBooks Online Accounting, and here is what we have done to make your outsourcing experience a gratifying one.
When you are starting to use SortMyBooks Online Accounting software, it pays to take some time to set up some defaults and associations in the following areas:
There are some expenses that come up each month in any business, such as electricity, telephone, petrol/diesel. What can happen in an outsourcing situation is that the business owner may have been entering electricity bills and tagging them with a nominal code of ‘electricity’, but once the activity is outsourced to a bookkeeper, he/she might categorise the same type of expense as ‘Light and Heat’. Nitpicky you might say, but when your accountant is preparing your figures to file, these two expenses need to merged into one. This takes time and costs the business money. There is an easy way to prevent this in SortMyBooks Online.
Go to Tools / Services
Set up a service called ‘Electricity’ and set the Vat rate and nominal code to be consistently used for it.
You can follow the same steps for many commonly used items. Some good ones to set up are Petrol and Diesel. By setting the correct VAT rate on each of these, it prevents people from making the common mistake of claiming VAT back on their petrol expenses.
You can actually go a step further and associate products and services directly to suppliers. This means as soon as you select the supplier name when entering a purchase invoice, the Vat Rate and Nominal will automatically fill in. As the Supplier name is usually on the invoice, this greatly reduces the chance of inconsistent data entry.
Click on Purchases, Suppliers, select your supplier, and click the Details tab. Click the dropdown on Default Item to select the product/service you want to associate with this supplier.
By doing this, whenever you enter a purchase invoice for a supplier, as soon as you select the supplier name, the service, vat rate and nominal code will be defaulted for you. This makes for quicker and more accurate data entry.