How Do I Know If My Bookkeeping Is Accurate?

There are several ways to check whether your bookkeeping is accurate. One of the most important is regular bank reconciliation. Your accounting records should be compared with your actual business bank transactions so discrepancies can be identified and investigated. 

You can also review outstanding invoices, supplier bills, payroll transactions and account balances for unusual or unexpected amounts. If your bookkeeping is accurate, your accounting software should provide a reasonable representation of the financial activity in your business. 

Regular reconciliation is particularly important for businesses using Xero. Bank feeds can import transactions automatically, but automated data does not guarantee that every transaction has been allocated correctly. Transactions should still be reviewed and reconciled. 

Another sign of reliable bookkeeping is that financial reports can be produced without significant unexplained discrepancies or large numbers of unreconciled transactions. Your BAS records should also be based on properly maintained transactions and supporting documentation. If your accounts are difficult to understand, contain many unreconciled transactions or regularly require corrections, it may be worth having an experienced bookkeeper review them. 

Young Guns Bookkeeping provides bookkeeping and reconciliation services to Melbourne small businesses and can assist with reviewing and maintaining Xero records. 

A bookkeeping review can identify issues such as duplicate transactions, incorrect account allocations, missing transactions and unreconciled bank items. If you have concerns about tax or BAS accuracy, you should also discuss the records with your accountant or registered BAS professional.