Rules to Better Accounting

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Rules to Better Accounting
  1. Do you know how to claim expense reimbursements?

    ​You should be reimbursed for all reasonable expenses incurred in carrying out your duties, which are above your normal costs, to and from the office.

    A common example is bus and train fares to client sites. In Australia, amounts under $100 could be reimbursed through Petty Cash but in China, it would be around ¥300. ​


    Remember to treat your company's money like your own and minimize costs where possible. Try to search around for a better price before committing to a purchase.

    All expense claims must:

    • Be work related
    • Be made within a week
    • Be signed by the claimant and authorized by the relevant Manager
    • Be supported by Tax Invoices
    • Not include alcohol, as it incurs FBT
    • Receipts should be in English (where possible), or you must write on the receipt what the expense is, and​ what it was for

    Tip: If necessary, you can use the Google Translate app to translate your receipts by taking a photo!  


    If you’re in China, all expense claims must:

    • Be work related
    • Only Fapiao is available
    • Be made within a month
    • Be authorized by the relevant Manager



  2. Does your company cover taxi costs?

    Traveling around Sydney can take time and your time is best spent doing billable work in the office or at a client site. Taking a taxi is perfectly acceptable, if it is going to save substantial time, compared with taking public transport.

    This is applicable to travel between client sites or the office and a client site. Work does not pay for taxi travel from home to a client site, or home to the office. Remember to always obtain a Tax Invoice from the taxi driver so you can request for reimbursement later on.

  3. Do your cheque and memo fields have a good description?

    If your descriptions have good comments then you don't need to go back to paperwork to investigate things.

    e.g.  The period the invoice relates to.

    memo field bad example
    Figure: Bad Example
    memo field good example
    Figure: Good Example
  4. Do you print out your general ledger for the week and ask your boss to initial?

    In your first month as an Accountant for a new company, you should print out the general ledger for the week and ask your boss to initial to say that the "cheque numbers and memo descriptions are good".

    It's good to catch any mistakes early, so that you know the requirements early on and don't have to go back and fix up large amounts of data later.

    Do whatever you have to do e.g. drive to your boss' house to get this done! It can save you days of work down the track.

    General Ledger.jpg
    Figure: Weekly ledger
  5. Do you do know the best technical solution to enable purchase approvals?

    This is one of the most common workflows that every company needs.

    Companies have employees who make purchase requests, then business rules get fired, then you wait for approval.
    E.g. If less than $1K, then your direct manager can approve.

    Unfortunately, no one has an out of the box solution for this, so here are your choices:

      Choices:
    • TFS 2012 (too hard)
      You can have requests go in as a work items but there is no workflow service that runs on the server, so the workflow would have to be in a separate web service using WF4.
    • SharePoint 2013 (recommended)
      SharePoint doesn't have an out of the box solution. To configure it, have the purchase requests go into SharePoint lists and then the workflow service that runs on the server (using WF3 under the covers) can have business rules added.
    • CRM 2011
      CRM also needs an out of the box solution. You can have requests go into as CRM Entities and there is a workflow service that runs on the server, using WF3 under the covers.​
    • JIRA
      Jira supports workflows and approvals, like SharePoint, but it is not .NET

    Suggestion to Microsoft: Please provide an out of the box solution for CRM and SharePoint, so we don't have to configure this for each client.

  6. Do you have monthly financial meetings?

    ​It is important to have monthly meetings​ to get an overview of where the company finances are throughout the year.

    Since different people need to report for different sections, it's a good idea to split this into 2 meetings.
    In this meeting, key staff members should review the past month and look at forecasts for next month. ​

    Here is a sample agenda:

    Pre Meeting:​

    1. ​Reconcile invoicing system with the Accounting system
    2. Print Monthly Profit and Loss Report
    3. Print YTD Profit and Loss Report
    4. Print Monthly Profit with graph
    5. Complete and print current cash position and include the previous signed version
    6. Review invoices that should be canceled or removed
    7. Fix any invalid data
    8. Print Monthly Receipts Report
    9. Print Invoices vs Receipts by financial month
    10. Print Expenses by Financial Month Report
    11. Print Snapshot Report - Monthly and Cumulative Data
    12. Print Profit and Loss Return % Report

    Note: the pre-meeting section should be done the day before meeting #1, and a lot of it can be delegated to admin employees

    During meeting #1:​​

    1. Review Sales reports
    2. Review billable leaderboard
    3. Review utilization report for the month

    Note: It's a good idea to record a quick summary of​ this meeting so people in Meeting #2 know the executive overview.

    During Meeting #2:​


    1. Review Cash Position
    2. Review revenue by client
    3. Review monthly invoices and receipts
    4. Review monthly profit with graph
    5. Review monthly expenses
    6. Review monthly profit and loss
    7. Review trends year on year
    8. Review trends profit contribution %
    9. Review profit and loss return %​
  7. Do you pay invoices completely?

    If you negotiate with a supplier in relation to an invoice, do you ensure the invoice is reissued?

    It is not always common but sometimes you will negotiate a change in the agreed price once an invoice has been issued by a supplier. This might be because there was a change or defect in the good or service provided and a lesser amount is agreed or an agreement that a certain amount of the invoice will be paid later when the rest of the product or service is delivered.

    Do not pay an invoice in part. You should ask the supplier to reissue the invoice or issue a credit note in relation to an invoice. Otherwise, the supplier may say that there is a balance of the invoice owing.  

    “Jim. OK, I'll just pay $165, not the $220 on the invoice"

    Figure: Bad example

    “Dear Jim, Please reissue the invoice or provide a credit note for the now agreed correct amount." 

    Figure: Good example
  8. Do you use an app for expenses?

    ​​​​​​​Tracking expenses can be a painful process of accumulating receipts and entering them into outdated systems… but there is a better way. 

    Various apps help solve the above problem. Using a modern Accounting system such as Xero, some connected apps can be used in conjunction with the accounting system and they include:
    It may be difficult to determine which app would be best suited for your business so below is a comparison of some of the major features of each app.

    Features (based on 5 users)

    Receipt Bank

    Hubdoc

    ​Expens​​​ify

    ​Preferred Option

    ​Pricing​
    ​$360/annual
    ​Free with Xero
    ​$840/annual (minimum)
    ​Hubdoc
    ​Submission Procedure

    ​Phone App – take a photo and submit it to the Receipt Bank email OR forward an email to the Receipt Bank email. 
    ​Same as Receipt Bank

    ​Same as Receipt Bank

    ​No preference – the same procedures with all.
     
    Figure: Hubdoc email for receiving

    ​Restriction on Invoice uploads 
    ​300/mo
    ​Unlimited
    ​Unlimited​

    Hubdoc and Expensify

    ​Back-up
    ​Unlimited – Never deletes and remains archived
    ​Unlimited – use cloud back up and security. Never deletes 
    ​Unlimited – Never deletes and remains archived
    ​Hubdoc – the added security just seems better
    ​Organising
    ​No real organization of documents. Either inactive or archived and ordered in date/supplier order
    ​Automatically organized into folders (can be updated). 
    ​Same as Receipt Bank
    ​Hubdoc

    ​Expense Rules
    ​Automate rules (or after the first occurrence) as to where expenses are to be accounted to (account categories) 
    ​Same as Receipt Bank – however seems to only be on each invoice (can’t create outside of existing invoice – not that important)
    ​Same as Receipt Bank – little easier to navigate to the section 
    ​Expensify 
    ​Accounting Codes
    ​Syncs with Xero account categories and automatically chooses those options. Brings bank reconciliations of these invoices to 90% of the way
    ​Same as Receipt Bank
    ​Not available at $840/annual. If the business wants to use this, the subscription plan will be $1800/annual.
    ​Receipt Bank or Hubdoc

    ​Receipt Fetch
    ​Ability to integrate with most common suppliers (utilities, banks and some more). Automatically grabs any new invoices and pushes to Receipt Bank
    https://help.receipt-bank.com/hc/en-us/articles/360005754174-List-of-Suppliers-for-Invoice-Fetch 
    ​​More options than Receipt Bank and more major suppliers
     
    https://go.hubdoc.com/hubfs/HubdocLiveAUConnections.pdf
    ​Limited options https://use.expensify.com/all-integrations
    ​Hubdoc

    ​Phone Compatibility
    ​iPhone, Android and Web-based 
    ​All Phones 
    ​All Phones
    ​Hubdoc or Expensify
    ​Two-factor Authentication
    ​No
    Yes​
    ​No
    Hubdoc​
    ​How-to Videos
    ​No
    Yes​
    Yes​
    Expensify - has more videos​

    Overall, Hubdoc is a clear winner. Also not listed above is that hubdoc has unlimited user capacity.

    An additional recommendation in using these apps is to set-up default receiving emails to receive invoices, so users can either forward all invoices to that email or just take a photo with the app.

    pic.png
    ​Figure: Good Example – Hubdoc default email for receiving
    ​We can also do the vis versa, so all invoices going to a hubdoc default email can be forwarded back to a company internal email for reference. 

    ​​pic1.png
    Figur​e: Good Example - Hubdoc email can forward to another email (forwarding and receiving can be both ways)

    Expense apps are a timesaver, both for the day to day user, as well as the accountant receiving the expenses.

    ​​As a user, all you have to do is take a photo of the receipt from your mobile app and add a comment (all other data is pulled in via OCR “Smart-scan”), then all of these expenses get batched together and sent on a weekly basis to the accountant, who can then manage them in bulk. 
    Best of all… for light users… it’s free!​ ​2020-06-12_12-10-17.png​​

    Figure: Good Example – Hubdoc is free with Xero​​

    ​For better res​ults claiming your receipts, please read Do you know how to enter a Hubdoc receipt?​



  9. Do you know how to enter an Expensify receipt ?

    ​ Expensify is great for tracking receipts, but if you don't use it in the right way the reports can be hard to reconcile.

    To avoid confusion, add as much detail as possible about the purchase and who authorized it. To make this easier, your company can set some required fields to ensure that you have all of the relevant data entered for each claim. This will make your claims a lot more unified and easier to process. 

    For example, on the free version of Expensify, you can make the "Category" field a required field by switching the option to enabled. 

    More features are available if you purchase the full version, and you can see these options on their pricing features page.

    Expensify options.png
    Figure: Selecting "Enabled" ensures that people using your policy have to enter that field before claiming 

    Required fields are then identified by an asterisk when you are uploading an expense. Conveniently, most of this information is completed for you by the Smart Scan function.  On the free version, there is still room to add a manual "Comment" for more complicated claims if required.

    Expensify_nocompulsary.png
    Figure: Bad Example - here there are only 3 required fields shown for this claim, the Name of Merchant, the Date, and the Total.  Without adding an additional Category, or Comment, it will be more difficult for the accounts staff to process this claim
    Expensify1.png
    Figure: Good Example - You can see the fields marked with an asterisk that they are required fields. To claim an expense from SSW, you need to give the "Name of Merchant", the "Date" of purchase, "Total", and a "Category". Most of this information is completed for you by the smart scan and there is still room to add a manual "Comment" for more complicated claims if required​

    If you complete these fields, it will make your reports much nicer to read and easier to claim.

    Expensify example categories.png
    Figure: Good example - You can see highlighted here that the expenses have been sorted by "Category" and that they have all of the relevant information to claim. A Date," "Name of Merchant," and what the expense was for is clearly identified and you can also see each has an attached receipt. You can also see in one example that an additional "Comment" has been added to a more complicated expense to reflect the approval for that purchase
  10. Do you separate your expenses by creating separate reports in Expensify?

    ​​Does your Account Manager get confused when you try to claim all of your expenses at once?

    Expensify lets you separate your expenses into different folders to avoid confusion. You can make a new report for different work clients, events that you have attended, or to separate your personal from work expenses.
    Expensify6.PNG
    Bad example: Two unrelated expenses in the same folder, this can be confusing to Accounts Staff.​​

    Expensify lets you create new reports so that you can separate your receipts and reports. 

    Expensify9.PNG
    ​Good example: Expenses separated into different folders - easier to claim and track what your receipts were for!

    To Create a new folder on an iPhone​:

    1. Open Expensify app on your phone

    2. From the Dashboard select "Reports"

    Expensify1.PNG
    3. Add a new report by clicking on the + symbol. 
    Expensify2.PNG
    4. ​Click in the area of text that says "New Report" to re-name the report.
    Expensify3.PNG

    ​5. Re-name your report and then save. You can also change the policy if required. To automatically email your receipts to New, select the SSW policy.
    Expensify4.PNG

    6. You can then add expenses directly into the folder.

    Expensify5.PNG

    ​To Edit a folder on the iPhone

    ​If you put a receipt in the wrong folder, you can edit its location, or upload a receipt directly into the new folder.


    ​1. On your Dashboard select Expenses | Select correct expense to edit | Report

    Expensify8.PNG
    2. Select the folder you want to move it to and save.​
    Expensify7.PNG
  11. Do you know how to enter and file a Hubdoc receipt ?

    ​​Hubdoc is great for tracking and accounting for receipts, but if you don't use it in the right way the reports can be made more difficult to reconcile.​​

    To avoid ​​confusion, add as much detail as possible about the purchase and who authorized it. To make this easier, your company can set some required fields to ensure that you have all of the relevant data entered for each claim. This will make your claims a lot more unified and easier to process. 

    ac.png 
    ​Figure: Users to accept invite to use Hubdoc

    de.png
    Figure: Take a photo with the Mobile Hubdoc app 

    ​​wer.png
    Figure: Photo of Receipt and submitting basic invoice details - generally is read by OCR of the software.


    che.png
    ​Figure: Details that can be automated for Accounting reconciliation purposes

    ​The user or the administrator of the account can set up rules for each invoice in regards to their publication status and reconciliation details on the first instance. Going forward, any repeat of the invoice or the supplier will be filled in based on those rules set up. 

    There is still an opportunity to review all the details, so setting up rules will simply fill in the repeat details each time. This is to ensure consistency in the reconciliations and save time for both user and the Accountant.

    Depending on the permissions of the User, they can also publish the invoice to Xero which can be recognised conveniently when completing the reconciliation process on Xero.

    Tip: Hubdoc will automatically create folders to categorise the invoices and store for the user. These folders can be reorganised or renamed with ease. We recommend updating the folders early on so the invoices are collated in a useful manner for your business. ​

    1.png




  12. Do you treat freebies as real customers?

    ​In the course of business, you may occasionally provide some services or products to selected customers free of charge or at a discount rate. Often, because you're waiving one rule (the "please pay me" one!), you waive all your normal rules of service. This is a very bad habit for two reasons:
    1. Freebies/discounts need just as strict controls as regular projects

      When you are giving something away at a discount or for free you are expecting a loss compared with a regular client. If you fail to follow regular processes not only will you incur an even greater loss you provide a lesser standard of service and put greater risk on the success of the project.

      A discount or freebie should follow all the standard processes such as:

      Consider the follow scenario:

      You have a concreter buddy who offers to do your driveway for mate's rates. He won't accept full price (because you're friends) and he thinks he's doing you a favour. The problem is, he won't commit to a timeframe because he has customers that ARE paying full price. You're quite happy to pay full price, because you know he does great work and you want to support his business. In the end, no one is happy. You have an extended wait to get the job done for a discount you don't want and he feels pressured to do extra work in his spare time.
      A better approach is for the concreter to offer the discount AND book you in as a normal customer. He can give dedicated time and professional service and you get the job done with minimal delay. You can also provide excellent feedback and suggestions ​​​on the service he delivers, being both a friend and a customer. It is a much better outcome.

    2. Feedback on service

      Often the people you choose to provide a freebie are the best people to provide feedback on your product or services. When you waive all your standard processes, they have no opportunity to review how you conduct your business. So if you're offering a freebie (or any discount), you should ensure every normal standard of business is followed (including sending $0 invoices!) and make sure you get valuable feedback to help you run your company better.

      Sample email: 

      Hi Bob,​ 
      ​​
      Sure we would love to have you at our event for no charge. You may register just like a real client.

      You will receive an invoice with the items on it at $0. 

      It would be great if you could give us feedback on anything that could improve the experience (just as if you were a normal client).

      Regards,
      Adam


      Zero Invoices:
      When entering timesheets for free work, set your rate to $0.

      zero-timesheet.png
      Figure: It is a good idea to set your rate to $0 and show it on the invoice