How do bookkeepers / accountants usually handle receipt / source document collection from clients?
Hi everyone,
Genuine question about what's standard practice with bookkeeping for small businesses.
When a client engages a bookkeeper / accountant to do their books, do they generally expect to be sent every single receipt to match against the bank feed in Xero?
From what I understand, transactions such as a software subscription can be verified once via a receipt and then just coded accordingly without needing every receipt going forward but what about something like a Woolworths receipt that may have a mix of GST and non GST items, personal items and items that need to be coded to different categories.
From what I've read, a lot of bookkeepers and accountants don't collect / view receipts from their clients and leave it completely up to them to ensure they are keeping & organising their own receipts... so how do bookkeepers / accountants know how to allocate the expense and correctly code the GST in their client's accounting software just via the bank feed?
I know someone who just sends their bank statements to their accountant every quarter with no receipts and they do his BAS from that, but my question is that how does the accountant know the GST treatment, if it's a personal expense, what kind of expense it is and so on if my friend isn't sending them his receipts? Is this normal practice and bookkeepers / accountants just have to use professional judgement when reconciling the bank feed?
I am curious on how this process works without putting the business at risk by having a bookkeeper / accountant code the transactions incorrectly.