As a business owner, understanding the true state of your finances is essential for making informed decisions. Yet, even the most diligent bookkeeping can sometimes miss crucial details that could impact your cash flow, tax obligations, and overall financial health. That’s where our file review service comes in, offering a meticulous analysis of your accounting files to ensure accuracy, compliance, and optimal setup.
Why File Reviews Matter
We regularly conduct file reviews for new clients or on behalf of accountants who want a thorough examination of their client’s files before important meetings. Here are a few examples of how our file review service has made a difference:
The Painter with a Hidden GST Refund
A new client, a painter in business for nearly two years, had $53,000 in unpaid BAS lodgements with the ATO. The owner struggled to manage cash flow, constantly finding it hard to cover this debt each quarter. Our review uncovered that while GST on sales was being paid, GST credits on purchases were missed due to incorrect Chart of Accounts setup. What seemed like a massive debt turned into an $8,000 refund once we adjusted the BAS lodgements.
Builder’s Cash Flow Misalignment
For a builder client, incorrect BAS settings were costing them money. Their file was set to “Accrual” rather than “Cash,” causing them to pay GST on issued invoices rather than received payments. This small setup error was significantly affecting their cash flow every quarter.
Payroll Discrepancy for a Medical Client
A medical practice faced recurring discrepancies in their Payroll Liability account, showing a $200 variance per pay period. This went unnoticed for seven months, leading to one salaried staff member being underpaid. Our review quickly identified and resolved this issue, safeguarding the business from potential legal ramifications.
What We Check in a File Review
An initial file review typically costs between $250-$500, depending on the complexity of the file. Our comprehensive checks include:
Tax and GST Settings
Ensuring all tax-related settings align with the latest ATO requirements.
Chart of Accounts Setup
Correct setup for optimal tracking of income, expenses, and tax obligations.
Profit & Loss (P&L) and Balance Sheet Accuracy
Validating the accuracy of your financial statements.
Sales and Expenses Allocations
Ensuring that every transaction is correctly allocated.
Payroll Settings
Identifying discrepancies that could lead to compliance issues or incorrect payments.
Following a review, we provide a detailed report highlighting any issues found, along with recommendations for process improvements. Whether you manage your bookkeeping internally or through an external accountant, our ongoing reviews—available monthly or quarterly—help ensure that your files remain accurate and up-to-date. You can choose to make the adjustments yourself or let us handle the fixes.
Ongoing Support and Improvements
Our clients appreciate the ongoing value of regularly scheduled reviews. For example, we work with businesses that handle their own bookkeeping but rely on our expertise to catch any errors they might have missed. This proactive approach not only improves financial accuracy but also empowers business owners to make better decisions.
The Importance of Regular File Reviews
Much like regularly reviewing your insurance policy, it’s essential to routinely check your accounting file. A recent client—a dental practice—had minimal issues, but the value of our findings was enough for them to book annual reviews. Another client, an IT business, discovered that their Aged Receivables were three times their monthly turnover, highlighting significant cash flow issues that needed addressing.
File reviews are not about pointing fingers; they are about empowering business owners with clearer, more accurate financial insights. Accurate numbers lead to better decisions, ensuring your business remains on the path to growth and success.
