From XU Magazine, 
Issue 39

How your accounting firm can easily charge for bookkeeping corrections

Navigating the gray area of bookkeeping corrections when providing accounting services.

Gareth Salomon FCA, Founder of Xenon Connect, explains how to ensure that your accounting firm is paid for bookkeeping corrections.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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It can be a murky area full of ambiguity. You agree a fee for taking care of the client’s year end accounts, tax returns and perhaps a review of the VAT returns – but the business owner wants to keep control of the day-to-day bookkeeping rather than outsource to your bookkeeping team.

Inevitably, this will lead to the need for corrective actions on the bookkeeping data when it is passed to you. Herein lies the issue. From the client’s point of view their job is complete. The fact that the savings account activity has not been posted, supplier bills have been uploaded but the bank payments have gone on as spend items, items of negligible value have swamped the fixed asset addition codes and five different VAT codes have been used for one supplier – all irrelevant to the client!

From your firm’s point of view, all this work needs to be rectified to produce accurate accounts and tax returns. This takes time and knowledge, and we all know that means an additional cost to your firm.

The Problem

So, what do you do? I bet from time to time your team has sucked up this additional work, probably because you just want to get the job out of the door and a back-and-to with the client (who may not have the technical ability to correct the items anyway) will just prolong the process. I also bet that, from time to time, your firm has absorbed the cost of this additional work – especially where fixed fees are involved. I know. I’ve been there.

The problem is that the process of communicating to the client the issues with the bookkeeping can be arduous. It will probably involve explaining the fundamental principles of bookkeeping and who has time for that? Remember, the client has not agreed to pay for bookkeeping, or bookkeeping training.

The Solution

There is a way that you can quickly communicate the main issues that are affecting the bookkeeping to the client, without the need for manual writing of queries.

At the click of a button, you can produce an overall bookkeeping health report in PDF format to send to the client, showing 20+ types of bookkeeping error affecting their records. You can also send a detailed list of each of those 20+ types of error showing them exactly which transactions require rectification. Many accounting firms are doing that right now, using Xenon Connect.

Now, of course, highlighting the specific issues with the bookkeeping data to the client does not necessarily mean that they will have the capacity to fix them themselves. But this means that your firm can quickly provide them with tangible issues that make it easier for the client to stomach an additional bookkeeping fee. It is all about transparency and fairness.

Want to try Xenon Connect out? Connect one free organisation to your partner account today.

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