Why Do Plumbers Have Leaky Taps?
Recently Diligence Bookkeeping in Geelong, was approached to do the bookkeeping for a bookkeeper!! Peter is a great bookkeeper, and was so busy that he never had time to do his own books. Incredibly it meant that he was over four years behind in his returns.
In some ways this was great news. Peter was able to help us to bring all of the data from the last four years into the right format, and very quickly show us the pattern of his trading. Once we had this it was really easy for the Diligence bookkeepers to create a database for him.
Peter’s database was set up on Xero Accounting Software within 24 hours. By converting his digital bank records and paper transactions into data it was possible to complete four years of bank reconciliations in just one day. This meant that Peter could lodge all of his old returns, and essentially catch right up in no time at all.
Is this possible for any business person? Simply, yes. Although the process of getting the transaction information into raw data is sometimes time-consuming, once that has been done it is possible to group all of the data alphabetically and not by date. Once data is sorted alphabetically it doesn’t matter how many years of data there is, if the transaction says BP, it is very likely fuel and so bulk transactions can be treated in one go.
It is important to note that in all cases where you want to claim a deduction, you must keep the receipt for that expense. It is likely in the event of an audit that if there is no receipt, there will be no allowable tax deduction.
These kinds of solutions for “leaky taps” are very possible and the conversation that needs to be had with the ATO is one that Diligence Bookkeeping have had for many of our clients, successfully in the past.