Bookkeeper Manual

Definition of bookkeeper

What does a bookkeeper do?

Bookkeeping refers to the systematic recording, organizing, and maintenance of financial transactions and records of a business. It involves the process of keeping track of all financial activities such as purchases, sales, receipts, and payments, typically done by a bookkeeper or using software.

Importance of Bookkeeping in Business:

  1. Financial Control: Bookkeeping provides a clear picture of a company’s financial health. It helps businesses monitor income and expenses, enabling them to make informed financial decisions.
  2. Legal Compliance: Accurate bookkeeping ensures businesses comply with tax laws and regulations. It provides the necessary documentation for tax filings and audits, helping to avoid penalties and legal issues.
  3. Business Planning: Detailed financial records help in creating budgets, forecasting cash flow, and setting financial goals. This information is crucial for strategic planning and growth initiatives.
  4. Monitoring Business Performance: By tracking key financial metrics over time, bookkeeping helps businesses evaluate their performance and identify areas for improvement or cost-cutting.
  5. Tracking Deductions and Expenses: Proper bookkeeping ensures that deductible expenses are recorded and documented correctly, maximizing tax deductions and reducing taxable income.
  6. Facilitating Financial Analysis: Financial statements derived from bookkeeping data, such as balance sheets and income statements, provide insights into profitability, liquidity, and overall financial stability.
  7. Supporting Business Valuation: For potential mergers, acquisitions, or selling the business, accurate financial records are essential for valuing the business and negotiating terms.

Bookkeeping is fundamental to the financial management of any business, ensuring transparency, compliance with regulations, and providing essential data for decision-making and strategic planning.

Skills Required

  • Numerical Proficiency
  • Attention to detail
  • Organizational Skills

Rolls and Requirements

  1. The tasks involve a comprehensive set of responsibilities related to financial management, customer service and administrative duties.
  • Log on to the Xero accounting software and refresh bank feeds of bank accounts.
  • Transaction management: Check payfast/Snapscan, Yoco for transactions that needs to imported manually, copy and paste into CSV file and import.
  • This process ensures that all financial transactions are accurately recorded in Xero and matched with corresponding invoices or bills. It also involves proactive customer service through email management, addressing any account-related inquiries promptly.
  • Raising Bills/Cash Slips in Xero: Examine other folders for tax invoices that need to be raised in Xero.
  • Capture and file these documents into appropriate folders for record- keeping/ (please review policy for disposal of slips).

2.Interacting with suppliers as a bookkeeper involves several key aspects to ensure smooth operations and financial accuracy.

  • Establishing Accounts: Collect supplier information including contact details, payment terms, and preferred communication channels.
  • Setting Up in Accounting System: Input supplier data accurately into the accounting software for tracking transactions.
  • Regular Communication:
  • Order Confirmations: Ensure orders are documented and confirmed in writing to avoid misunderstandings.
  • Payment Terms: Clarify and confirm payment terms regularly to maintain good financial standing.
  • Updates and Changes: Communicate changes in requirements or operations promptly to suppliers.
  • Transaction Handling:
  • Invoice Processing: Receive, review, and record invoices accurately into the accounting system.
  • Payment Processing: Verify invoices against orders and payment terms before processing payments.
  • Reconciliation: Regularly reconcile supplier statements with accounting records to identify discrepancies.
  • Dispute Resolution:
  • Prompt Communication: Address discrepancies or disputes in invoices promptly through clear communication.
  • Documentation: Maintain records of communications and agreements related to dispute resolutions.
  • Compliance and Reporting:
  • Tax Compliance: Ensure suppliers provide necessary tax documentation (e.g., W-9 forms) and comply with tax regulations.
  • Reporting Requirements: Prepare accurate reports on supplier payments and liabilities for financial reporting purposes.
  • . Relationship Management:
  • Building Rapport: Foster positive relationships through professional and courteous interactions.
  • Feedback: Provide constructive feedback to suppliers to improve service and efficiency.
  • Record Keeping:
  • Document Retention: Maintain organized records of all supplier interactions, contracts, invoices, and payments.
  • Audit Preparation: Ensure records are readily accessible for audits and compliance checks.
  • Technology Utilization:
  • Use of Software: Leverage accounting software and tools for efficient supplier management.
  • Automation: Implement automated processes for invoice receipt, approval, and payment to streamline operations.
  • Continuous Improvement:
  • Process Review: Regularly review supplier management processes for efficiency and effectiveness.
  • Feedback Loop: Solicit feedback from internal stakeholders and suppliers to identify areas for improvement.
  • Ethical Considerations:
  • Fair Practices: Adhere to ethical standards in all supplier interactions, ensuring fairness and transparency.

Credit Notes

  • Verify Details: Check the goods return slip for accuracy and completeness. Ensure that all necessary information such as the date, stockiest/distributor  details, reason for return, and item details are filled out correctly.
  • Inspect Returned Goods: Physically inspect the goods that have been returned. Check for any damages, discrepancies, or signs of use that may affect their return eligibility.
  • Cross-reference with Records: Compare the details on the goods return slip with your records (such as invoices or receipts on Xero and MRP and check the batch number to make 100% sure ) to confirm that the items being returned match what was originally supplied.
  • Evaluate Return Eligibility: Determine if the returned goods meet your company’s return policy criteria. This includes checking if the return reason is valid (e.g., damaged goods, incorrect item sent, etc.) and if the goods are in resalable condition. If goods is damaged opened and used, we
  • Document the Return: Record the return in your internal systems. This may involve updating inventory records, noting the reason for return, and possibly generating a return authorization or credit note.
  • Communicate with Stockist: If there are any discrepancies or issues with the return, communicate promptly with the stockist to resolve them. This could involve clarifying the reasons for return or discussing any potential credits or replacements.
  • Process the Return: Depending on your company’s procedures, process the return by either issuing a credit note, replacing the goods, or taking any other agreed-upon action.
  • Follow-up: After processing the return, follow up as necessary to ensure that the stockist is satisfied with the resolution and that any credits or replacements are correctly applied.
  • Learn and Improve: If there are frequent returns or issues with specific products, use this information to improve your processes, product quality, or communication with stockists.

Fixed Asset management

To run depreciation for assets in Xero and ensure it reflects correctly in the Profit & Loss report, follow these steps:

Draft Fixed Assets – Go to Accounting> Advanced Accounting > Fixed Assets

  • Drafts: Usually contain assets pushed into the 6000- accounts with the CAPITAL GOODS PURCHASED VAT category
  • Check all details of the draft such as: Asset type, Description of the asset, date of purchase.
  • Depreciation method and register the asset if all is in order.     

Create a NEW Asset

  • Click on New Asset > Enter the Asset Details>
  • Name: Enter the asset Name (e.g., Mac Pro)
  • Asset Number: Automatically generated.
  • Purchase date: Essential for tracking depreciation
  • Purchase Prices: Essential for Calculating depreciation
  • Warranty and Serial number: Optional Fields
  • Asset Type: Communication & Computer Equipment, Factory Equipment & Furniture,
  • Motor Vehicle, Office Equipment Furniture & Fittings.

Depreciation Details

  • Book Value: For assets over R7000, enter the deprecation start date (the purchase date or last day of month)
  • Depreciation Method: Use the Straight-Line Method.
  • Averaging Method: Full month.
  • Rate: Typically for Communication & Computer Equipment 33,33% or 3 years is the rate to use, Motor Vehicles: 5 years or 20% per annum, Office furniture & Fittings we use 5 effective years or 15% per annum.
  • For Assets under R7000, you can fully depreciate them in the purchase month, and complete the registration by saving the details. 

Reconciliation Process:

  • Check the Fixed asset register reconciliation report: Ensure that the asset register and the balance sheet correspond. Investigate any variances.
  • Click on depreciation schedule and Open the Account transactions on 2 separate tabs and compare     

Bills to Pay

Instructions:

We use Xero for raising bills we receive from suppliers in MRP Easy (Slips, tax invoices ect)

  • Receive Delivery Note: The procurement manager will provide you with a delivery note for the goods received.
  • Request Invoice: If the delivery of goods does not come with an invoice, the procurement manager will inform you when you need to request an invoice from the supplier.
  • Xero: Start by logging into your Xero account.
  • Ensure that all drafts from your MRP Easy system are pushed to Xero. This gets pushed through by the production coordinator.
  • In Xero go to the “Drafts” section where the pending invoices are listed.
  • Review Detail for each draft invoice in Xero, check purchase prices & confirm that the purchase prices listed on the draft match the prices from your MRP system and the actual agreed prices.
  • Ensure that the quantities on the draft invoice are consistent with what’s recorded in your MRP system or the actual delivery.
  • Due dates: Please make sure that the due dates are correct, 30 days account or COD account.
  • Account Allocations: Always double check the category the product belongs to in MRP and allocate it to the correct account in Xero (Purchases – Raw Materials – Pigments – RM-04/2000-704)  
  • Submit for Approval and inform Management to approve bills.

Documentation: Ensure all necessary documentation is completed and filed correctly for record-keeping and future reference. (refer to the disposal of physical copies policies)
 

Instructions: Veryfi integration

Use Veryfi:

*Veryfi is synced with Xero and Dropbox, so all scanned items get filled in Dropbox and needs to be moved.

  • Scan the physical invoice or slip using Veryfi. This software extracts the data and syncs it with Xero, creating a draft invoice with the necessary line items.

Open Xero:

  • Go to Xero and locate the draft invoice that was created from Veryfi.
  • Check Line Items: Review each line item to ensure that all data (amounts, descriptions, etc.) has been correctly transferred from the scanned document.
  • For each line item, verify that the account code allocated is correct. The account code should correspond to the appropriate expense or cost account based on the nature of the item or service.

Add Required Details:

  • Ensure that any required details like invoice numbers, purchase order references, or other necessary information are correctly entered into the draft invoice
  • Ensure that all details, including amounts, descriptions, and account codes, are accurate and aligned with the original invoice or slip.
  • Once everything is confirmed to be accurate, finalize the drafts and push to awaiting approval.

Inform management to approve all bills.

Filing of Tax invoices (30-day Suppliers)

*Veryfi is synced with Xero and Dropbox, so all scanned items get filled in Dropbox and needs to be moved,

  • Open One Drive and navigate to the relevant folder.
  • Locate Folder: Go to PN-08-B Accounting > Debtors and Suppliers > PN-08-02 Supplier Invoices. Choose the sub folder named FNB EFT & 30-Day Accounts.
  • Within this sub folder, open the folders designated for payable accounts. These folders should be organized by due dates or payment terms (e.g., 30 days).
  • Place the invoice in the folder corresponding to its due date.
  • Verify Filing: Ensure that each invoice is accurately filed in the correct folder and is correctly labelled / names Name of supplier > Invoice number> Purchase order number.

Filing of Slips/Once off/ COD Suppliers

Open OneDrive

  • navigate to ESE Suppliers & Service Providers > A Suppliers Invoices.
  • Open two windows: one for OneDrive and one for Dropbox. This allows you to easily move scanned invoices from Dropbox to OneDrive.
  • In Dropbox find the electronically scanned invoice that needs to be filed.
  • Determine the supplier associated with the invoice. If the supplier already has a designated folder, proceed to that folder. If it’s a new supplier, you’ll need to create a new folder.
  • Drag and drop the scanned invoice from Dropbox to the appropriate folder in OneDrive. Ensure it is placed in the correct folder based on the supplier’s name.

Ensure that the invoice is correctly filed under the supplier’s name and that new folders are properly created and labelled.

1.Overpayment

Definition: Overpayment occurs when a payment made exceeds the amount that was due.

Explanation: This can happen in various contexts, such as when paying bills, making loan repayments, or settling invoices. For example, if you receive an invoice for $100 but accidentally pay R120, you have overpaid by R20. Overpayments might be due to errors, rounding issues, or misunderstandings.

Resolution: Typically, the recipient of the overpayment will either refund the excess amount or apply it as a credit towards future payments. Companies usually track overpayments and adjust their accounts accordingly.

2. Prepayment

Definition: Prepayment refers to the act of paying for goods, services, or obligations before they are due or before they are provided.

Explanation: Prepayments are common in various scenarios:

      Services: Paying in advance for services such as subscriptions or memberships.

3. Credit Notes

Definition: A credit note is a document issued by a seller to a buyer, acknowledging that a certain amount of money is owed to the buyer, typically because of an overpayment, return of goods, or other adjustments.

Explanation: Credit notes are used to correct errors on invoices or to adjust transactions where the buyer is entitled to a reduction. For instance, if a customer returns a product or if an invoice was issued with incorrect pricing, the seller might issue a credit note to adjust the account balance.

Content: A credit note generally includes details such as:

    The original invoice number and date

    The reason for the credit

    The amount of credit being issued

Usage: The buyer can use the credit note to offset future invoices or request a refund. In accounting, credit notes help to accurately reflect financial transactions and ensure proper records.

4. Tax Invoices

Definition: A tax invoice is a type of invoice that includes detailed information required to claim tax credits, typically used for VAT (Value Added Tax) or GST (Goods and Services Tax) purposes.

Explanation: Tax invoices are crucial for businesses that are registered for VAT/GST because they serve as proof of tax charges and enable the buyer to claim tax credits. They must meet specific legal requirements set by tax authorities, which often include: The date of issue

    A unique invoice number

    The supplier’s and buyer’s details (name, address, tax identification number)

    A description of the goods or services provided

    The quantity and price of the goods or services

    The amount of tax charged

Purpose: Tax invoices ensure transparency in transactions and compliance with tax regulations. They are essential for businesses to maintain accurate tax records and claim input tax credits. Each of these documents plays a significant role in financial transactions, ensuring accuracy, compliance, and proper management of funds