Getting Your Books Ready for Your Accountant

The bill from your accountant is mostly a function of how long it takes them to understand what happened in your business last year. Books that answer their questions in advance cost less to work on than books that generate a list of them — and the difference is usually an afternoon of your time against several hours of theirs.

Why this is worth an afternoon

An accountant handed incomplete books does not stop. They estimate, they flag, they email you a list of unidentified transactions, and they wait. Every round trip adds days to the timeline and hours to the invoice. The work you do up front is the same work — done by the person who already knows what that $1,847 in March was for.

What to hand over

• Every bank and credit card statement for the full year, for every account the business used
• Sales records — all invoices issued, including cancelled, voided and unpaid ones
• Purchase records — receipts and supplier invoices for expenses claimed
• Your general ledger, income statement and balance sheet for the year
• A list of outstanding receivables — who owes you what at year end
• Loan statements showing principal and interest split
• Asset purchases — anything substantial bought during the year, with the invoice
• Vehicle and mileage logs, if you claim vehicle expenses
• Payroll summaries, if you have employees
• Sales tax filings already submitted for the year

Reconcile before you send

One check catches most problems: does your closing bank balance in the books match the closing balance on the bank statement? If not, something is missing, duplicated, or recorded in the wrong period — and finding it is much faster for you than for someone who was not there.

Then confirm that every transaction on the statements appears in your books, and that everything in your books appears on a statement. Transfers between your own accounts are the usual culprit, often recorded twice as income and expense.

The five gaps that cost the most

1. Unidentified transactions. A row labelled "cheque #214" with no description means an email, a delay, and a guess. Describe transactions as you record them.
2. Personal and business money mixed. If the business account paid for groceries and the personal card paid for software, someone has to separate them line by line. A dedicated business account is the single highest-value change most sole proprietors can make.
3. Missing receipts for large expenses. Small ones get estimated; large ones get disallowed.
4. Owner draws recorded as expenses. Money you take out of the business is generally not a business expense, and misclassifying it distorts your profit before anyone has looked at the tax.
5. Asset purchases treated as ordinary expenses. Substantial equipment is usually capitalised and depreciated over several years rather than deducted at once. Flag anything large so it is treated correctly.

Questions worth asking them

The handover is also your one scheduled conversation of the year with someone who can see your whole financial picture. Worth asking:

• Is my business structure still the right one at this revenue level?
• Are there deductions I am consistently missing?
• What should I be doing differently during the year to make next year cheaper?
• What are my instalment obligations for the coming year?

These are questions for your accountant, who knows your full situation — not for software, and not for a web page.

Exporting from iBill

iBill produces the general ledger, income statement, balance sheet and sales tax reports directly, and exports invoices and expenses as CSV. Because it keeps proper double-entry records underneath, the reports your accountant receives reconcile to each other rather than needing to be rebuilt.