What do you do when your accounting data doesn’t make sense?
One of my clients initially came to me for some training on Xero – she had a bookkeeper through her accountant but wanted to feel more confident about the questions she was asking. This client is a solicitor working for herself through a limited company and regulated by the Law Society, so it was imperative that her accounting was perfect, especially around the Client Accounts that she kept.
Unfortunately, after a little bit of training, she came to the realisation that that her accounting information didn’t make sense. The bank accounts were not reconciling properly, and the debtors’ balances were incorrect. Worse was that the client account balances did not reflect the information that was in the CRM.
I have been working for this client for a couple of years and in that time, we have changed the way we input into Xero. The information still comes from the CRM practice management software, but it is now posted manually.
The integration was causing too many problems, no detail exported that allowed any reconciliations to take place, the VAT was often wrong, and it was impossible to reconcile the client and office bank accounts. I spent a great deal of time in reconciliation and amending transactions.
You might think that this is a retrograde step, and you would be right, but so often we have found that integration doesn’t work smoothly and support is impossible to obtain. We have put in place a system that takes a couple of hours every month and which is above all correct.
The client is happy that she understands the numbers in her accounting system, she gets reports she can trust, she is now paying the right amount of VAT, the compliance filing of VAT and end of year accounts takes much less time than before and is reliable.
When the time is right, we will be able to hand over the system to a competent bookkeeper or to the client herself, content in the knowledge that the system works.
