The bookkeeping industry

The Institute of Certified Bookkeepers (ICB) promotes and maintains the standards of bookkeeping as a profession by establishing relevant qualifications and awarding grades of membership that recognise academic attainment, working experience and competence.

A “Member” of the ICB (MICB) attains certification by proving that they have performed bookkeeping services at a significant level for a period exceeding two years. By doing so, they have proven their bookkeeping knowledge.

Members must have a Certificate IV in Accounting and Bookkeeping. This qualification recognises a bookkeeper’s skills and competence formally and, more importantly, “relevantly” recognised within the education system.

Professional bookkeepers are:

• Experienced
  • Independent verification of the quality and quantity of experience held
• Undertakes professional development
  • A commitment to education, learning and development of skills via continuing professional development
• Registered BAS agent
  • A professional bookkeeper in practice will be a registered BAS agent
• Endorsed
  • A member of a professional body, committed to the requirements adherent to that membership including:
    • Acts with honesty and integrity
    • Acts in the best interest of their clients or employers.

Expectations of an ICB Certified Professional Bookkeeper

An ICB Certified Professional Bookkeeper should:

• Communicate regularly and effectively with the business owner. Problems can arise between the business owner and the bookkeeper when they go about their duties if good communication isn’t maintained between both parties. By your bookkeeper reporting to the business owner after each visit, both of you understand where the job is at, the time being taken to process, the expansion of areas requiring attention and what can be expected for the next appointment.
• Provide the output of the bookkeeping work: such as operational reports or simply proof that the bank reconciles (the type of reports should be agreed between you). This ensures that the business owner sees value for the time being spent.

The ICB has a Code of Professional Conduct which members sign up to and agree to not engage in any activities that bring themselves, the bookkeeping profession or the ICB into disrepute.

Business Activity Statement (BAS) Agent Registration

The Tax Practitioners Board (TPB) is a national government body responsible for registering and regulating (BAS) Agents.

To register as a BAS agent, you need to meet specific criteria:

• Be at least 18 years of age
• Satisfy the qualifications requirements set out in the tax agent services regulations 2022
• Satisfy the experience requirements set out in the tax agent services regulations 2022
• Be a fit and proper person
• Be able to maintain professional indemnity insurance that meets TPD requirements

BAS agent education and experience requirements

To register as a BAS agent, you need to meet specific criteria. There are two pathways for registration depending on your qualifications and experience.

Path 1 - Accounting qualifications

Primary Qualification:

• at least a certificate IV financial services in bookkeeping or accounting from a registered training organisation (RTO)
• certificate in financial services in bookkeeping or accounting (above Cert IV qualification) from an RTO or recognised tertiary institution

TPB-approved course in GST and BAS taxation principles:

• may be included in your primary qualification but must be listed on your academic transcript
• obtained through recognition of prior learning

Relevant experience:

• 1,400 hours in the past four years
• relevant experience can include working as a BAS agent, working under the control of a registered BAS agent or other experienced approved by the TPB

Path 2 - Professional association membership

Primary Qualification:

• at least a certificate IV financial services in bookkeeping or accounting from a registered training organisation (RTO)
• certificate in financial services in bookkeeping or accounting (above Cert IV qualification) from an RTO or recognised tertiary institution

TPB-approved course in GST and BAS taxation principles:

• may be included in your primary qualification but must be listed on your academic transcript
• obtained through recognition of prior learning

Voting membership of a recognised BAS or tax agent association

Relevant experience:

• 1,000 hours in the past four years
• relevant experience can include working as a BAS agent, working under the control of a registered BAS agent or other experienced approved by the TPB

In addition to meeting the qualification and experience requirements, you must be:

• at least 18 years of age
• able to maintain professional indemnity insurance
• able to demonstrate you are a fit and proper person.

BAS Code of Professional Conduct

The Code of Professional Conduct (Code) regulates BAS agents' personal and professional conduct. The Code has five underlying principles:

• Honesty and Integrity
  • You must act honestly and with integrity
  • You must comply with the taxation laws in the conduct of your personal affairs
  • You must account to your client for the money or other property if:
    • you receive money or other property from or on behalf of a client
    • you hold the money or other property on trust
• Independence
  • You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities that you undertake in the capacity of a registered tax agent or BAS agent
• Confidentiality
  • Unless you have a legal duty to do so, you must not disclose any information relating to a client;s affairs to a third party without your client's permission
• Competence
  • You must ensure that a "tax agent service that you provide, or that is provided on your behalf, is provided competently
  • You must maintain knowledge and skills relevant to the services that you provide
  • You must take reasonable care in ascertaining a client's state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client
  • You must take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client
• Other Responsibilities
  • You must not knowingly obstruct the proper administration of the taxation laws
  • You must advise your client of their rights and obligations under the taxation laws that are materially related to the services you provide
  • You must maintain professional indemnity insurance that meets the Board's requirements
  • You must respond to requests and directions from the Board in a timely, responsible and reasonable manner

Australian Accounting Standards

What are Accounting Standards?

The Accounting Standards are authoritative statements of how particular types of transactions and other events should be reflected in financial statements. Accordingly, compliance with accounting standards will typically be necessary for the fair presentation of financial statements.

Why are Accounting Standards Required?

The Accounting Standards aim to promote comparability, consistency and transparency in the interests of users of financial statements. For example, investors rely on financial statements and reporting to make informed assessments of companies and their investment decisions. The Australian Accounting Standards Board (the Board) is responsible for developing and issuing AASB Accounting Standards (AASBs) and the “care and maintenance” of the body of Standards.

Many entities regulated under the Corporations Act 2001 must apply Accounting Standards in preparing their financial reports. Some public sector entities are required to apply Accounting Standards by Commonwealth, State or Territory legislation through specific instructions to preparers or reporting frameworks set out in guidelines or regulations.

Although a professional body does not regulate bookkeepers, they have a professional obligation to take all reasonable steps within their power to ensure that entities with which they are involved comply with the Accounting Standards when recording financial transactions.

Bookkeeping today is far more than just entering data and reconciling the bank account. Bookkeeping is thinking about the needs of the business operations, assessing what systems are in use, adjusting processes for greater efficiency, producing reports based on accurate data and validating those results. Good bookkeeping integrates business systems and financial accounts to provide the business owner visibility in running their business well.

Knowing your clients means understanding what is important to them and their business and what motivates them. It also helps if you understand the vision they have for their business.

Getting to know your client:

• Builds a better working relationship
• Increases client loyalty and strengthens your position as their trusted accountant or bookkeeper
• Increases efficiencies you and your clients get to know each other’s systems and how to work together.

One of the ways you can get to know your client is to ask them and be genuinely interested in the answers they provide. This should be done in a structured way, for example, by creating a client questionnaire. You can use several software programs for this, e.g. Survey Monkey and Google Forms.

Sample Customer Feedback Form

Why do businesses need bookkeepers?

Bookkeepers save businesses time and money by reducing the risk of errors, streamlining financial reports, and keeping a check on savings and expenditures. They:

1. Keep the books updated - The bookkeeper's primary task is to maintain the records of all the receivables and payables accurately. They are experienced in spotting balance sheet errors like missing or double entries and can resolve such problems. They track the movement of cash from salary disbursements, supplier payments, invoices, sales and expenditures. They use the latest technology and software to process the data and save businesses time.
2. Manage cash flow – Bookkeepers send out and keep track of invoices. They oversee recovering outstanding invoices, deal with late-paying customers and clients, and manage suppliers' payments.
3. Accurate tax filing - Tax obligations depend on the structure and type of business and the number of workers employed by the company. Every company, trust or partnership in Australia must lodge a tax return for the business. Bookkeepers assist in managing tax compliance and avoiding late penalties by ensuring the GST, PAYG tax and superannuation obligations are lodged on time.
4. Understand the financial position of the business - Maintaining accurate financial information enables management to understand the financial position of the business and its profitability. Without correct records of the incomings and outgoings, it is impossible to assess the revenue generated by the business.

The accounting system is a functional part of the systems used in day-to-day business activities. Not all businesses require the same bookkeeping tasks to be performed, and not all require the same level of detail to be recorded in their accounting systems. Consider what is the minimum needed for your business to generate relevant financial and business reports.

Business compliance obligations

There are many legal obligations that a business must comply with, and it is not always easy to keep on top of these responsibilities. Bookkeepers can assist businesses in providing general information and guidance, acting as a liaison or intermediary between the business and government entities, such as the Fair Work Ombudsman or the Australian Taxation Office (ATO) and meeting compliance deadlines.

Other areas that bookkeepers may assist businesses with include superannuation guarantee (SG), instalment activity statement (IAS) and business activity statement (BAS) preparation and reporting, payroll tax preparation and reporting, record keeping, paying contractors and employees, compliance with the national employment standards (NES), calculating withholding tax, charging and claiming GST and registering for an Australian business number (ABN).

Watch

Stakeholder Management

Many believe that stakeholders are only the business's investors or profit makers. However, this is not the case. Anyone or everyone affected by the actions of a business or an organisation is a stakeholder for the organisation. Stakeholders have a vested interest in a business and can either affect or be affected by a business' operations and performance.

• Internal stakeholders exist inside a business, such as employees or management.
• External stakeholders do not have a direct relationship with the business. They are usually a person or organisation affected by the business's operations, for example, the ATO, software supplier, or external accountant.
• Primary stakeholders have the highest interest in the company as they are directly affected by the outcome. Examples of primary stakeholders include:
  • customers who purchase goods and services from a business that employs you as their bookkeeper or clients to whom you provide bookkeeping services
  • employees working for the business
  • owners who have a financial stake in the business.
• Secondary stakeholders are not directly involved in the day-to-day operations of a business. Secondary stakeholders may or may not have a vested interest in the company’s success or failures, but their opinions about it can influence its reputation by default. Examples of secondary stakeholders include:
  • consumers - while these people don’t directly engage with a business's products or services, they are still potential customers
  • the ATO - the business's financial success could depend on you meeting ATO reporting requirements.
• Direct stakeholders are involved with the day-to-day activities. Employees can be considered direct stakeholders as their daily tasks revolve around business operations.
• Indirect stakeholders are interested in the finished product or service a business delivers rather than the process. Indirect stakeholders concern themselves with things like pricing, packaging, and availability. Customers are a type of indirect stakeholder.

Bookkeepers consult with many stakeholders. Following are some examples of the type of advice you may need to consult external stakeholders on and where it could be sourced:

Communication skills

Communicating with internal and external stakeholders is necessary for any bookkeeper or accountant.
Effective communication skills help you express yourself, convey complex ideas, understand others and drive actions.

Good communication skills also means explaining tasks succinctly so that people understand precisely what they need to do and work is delivered consistently to a deadline. 

Developing effective communication skills relies partly on being confident and believing there is value in what you have to say. So, developing confidence is a vital part of enhancing this soft skill.

Communication falls into three categories, verbal, non-verbal and written. It is crucial to alter your communication style for different situations, people and mediums.

Here are some points you should consider when communicating verbally with colleagues:

Be kind, but be direct
When speaking with colleagues, get to the point quickly and don’t waste time. Get across what you need to say and finish the conversation with clarity. There should be no uncertainty about what is being asked or being told.

Slow down
Often we breeze through what we want to say without making sure the other person understands. Slowing down may seem counterintuitive, but it’ll save time on following up on questions or missteps in the long run that may take more time to rectify.

Have an agenda
Know what you will say, how you will say it, and what the end action needs to be before you start the conversation. Having an agenda will help you better communicate with your colleagues.

Watch

In the video ‘Two skills you must master to be a better accountant,’ A J Stockwell speaks about the importance of accountants and bookkeepers communicating effectively with clients or work colleagues.

Today many bookkeepers and accountants work remotely with colleagues and clients.

Virtual relationships can be devoid of all key indicators that help us connect as human beings, like:

• eye contact
• body language
• emotions
• visual and audible undertones

Because of this, the possibility of good communication between both parties is threatened. If you work virtually, you must ensure that other methods of communication are satisfactory enough to overcome the absence of the human factor. These methods may include:

• regular virtual meetings and discussions
• clearly written requests and confirmations
• responding promptly

Communication within the virtual bookkeeping relationship is a two-way street. Both parties must attend to their communication responsibilities to ensure a successful outcome. Both the bookkeeper and the client need to aim for clear and constant communication between each other and should action the following suggested strategies to achieve this level of communication:

Bookkeepers

• Always have a signed engagement letter in place. The engagement letter clearly states your responsibilities to your client and how you will work with them
• Ask the client to indicate their preferred time to communicate. Which day, what time etc.
• Find out what method of communication works best for a client, i.e. email, telephone, text messaging, Teams meeting, Zoom video etc.
• Organise and schedule regular meetings. These should be video-based via Google Hangouts, Teams, Zoom or Skype. It is important to see one another
• Don’t be afraid to use the telephone. Sometimes email isn’t enough
• Ask questions, and never assume anything.
• Tell the client if you encounter problems. Don’t avoid these issues as this will only lead to further problems. Always be honest with the client.
• Ask for permission to complete a task. Do not assume the client wants it or needs it.
• Be aware that sometimes words and phrases can be misunderstood. For this reason, always review meeting discussions before they end and send notes via email after telephone so that misunderstandings can be avoided.
• Put all requests in writing. Send an email to confirm what you agreed to do via meetings and telephone conversations.
• Report to the client each time a job is completed or action taken via email. Advise them about where you are up to, what’s completed and what still needs to be done.
• Answer emails/voicemails promptly and within the timeframes agreed to in the contract. Not answering messages conveys the message “you don’t matter to me.”
• If you know that you won’t be able to answer messages within the agreed time frames, set up autoresponders for your email system /or leave an automated message on your voicemail. This will explain why you cannot answer the message and when you will be answering it.

Client

• Answer emails, voice messages, emails or text messages within 24 hours.
• Attend virtual meetings no less than once a month or more regularly if needed.
• Ask for clarification if you are unclear about what your bookkeeper is doing.
• Provide requested data and answers to questions within 24 hours or by an agreed date.
• Confirm action requests in writing, i.e. email.
• Remove possible misunderstandings by explaining what was first meant or intended.
• If you cannot be the first point of contact, provide an alternative contact, e.g. secretary, personal assistant etc.
• Tell your bookkeeper if you are dissatisfied with a job or outcome.
• Allow and encourage contact between your bookkeeper and your accountant.
• Be open-minded and accept or try your bookkeeper’s suggestions and ideas.

Following is a sample bookkeeper engagement letter and a terms of engagement template from CPA Australia.

Sample Bookkeeper engagement letter

CPA Terms of Engagement Template

Some bookkeepers call themselves accountants. Many accountants spend significant time doing bookkeeping. The terms ‘accounting’ and ‘bookkeeping’ overlap significantly. ‘Accounting’ can extend into technical areas that bookkeepers typically are not qualified or experienced in performing. Sometimes accountants extend their influence into areas they are not suitably experienced or knowledgeable to provide.

Fortunately, codes of conduct for members of professional associations unanimously require accountants and bookkeepers to ensure they DO NOT do work they do not know how to do.

The Role of a Bookkeeper

Bookkeepers record financial transactions in an accounting system. Although it may be done manually, most bookkeepers use a computerised accounting system such as MYOB or Xero.

Bookkeeper Qualities and Expectations

There are some essential qualities you will need to have as a bookkeeper. Bookkeepers can access confidential information about their client's business and personnel. You need to demonstrate that you are trustworthy and can confidently report on your clients' financial situation. The areas to focus on include:

• Knowledge of general accounting principles, relevant legislation and current best practices.
• IT general skills, especially in accounting software, online government portals and electronic payments.
• Consistency, reliability and trustworthiness.
• Honesty – particularly in reporting problems, gaps in knowledge requiring research or mistakes that may have been made.
• Professional code of conduct evidenced by a high standard of service and strong work ethic.
• Able to research and analyse problems in the accounts.
• Speed and accuracy in data entry and typing.
• Regular professional development and professional indemnity insurance.

The Role of an Accountant

With the rise of technology and automation tools, the role of accountants is shifting. Accountants and CFOs are working more and more on strategy, analysis, and decision-making for businesses. However, they also manage taxes for companies and individuals. They use the profit & loss statement, balance sheet, and income statement to provide an overview of a business's financial health. In addition to Accountant and CFO, typical mainstream job titles include:

The table below explains the differences between a bookkeeper and an accountant.

Professional bookkeeping and accounting bodies have the important mandate of representing, promoting and enhancing the accounting and bookkeeping professions. Codes of professional conduct bind members of the Institute of Certified Bookkeepers and registered BAS agents.

ICB Code of Professional Conduct

TPB Code of Professional Conduct BAS agents

Included in the ICB code is the member's duty not to accept work that:

• the member lacks sufficient expertise or competence to complete
• would involve the member or any other person in the commission of any criminal act
• the member does not have adequate time or opportunity to complete promptly

In your role as a bookkeeper or accountant, you may be asked to provide a service or advice on something outside your competency area. For example, accountants or bookkeepers cannot advise clients on self-managed super funds (SMSF) unless they have an Australian Financial Services (AFS) licence.

Referring Clients

You must always act honestly, with integrity, within your scope of practice, and be aware of your obligations to the TPB. If you do not have the skills, competencies, and other relevant abilities to service your clients, you should refer them to a trusted colleague who can assist them.

Some areas where referrals might be appropriate are:

Financial planner

Financial planners and advisers in Australia need to meet the minimum standards set by the Australian government. This includes an approved Bachelor's degree or higher, a professional year of supervised experience, and an exam set by the Financial Adviser Standards and Ethics Authority (FASEA).

Tax Agent

A registered tax agent is a specialist accountant who can prepare and lodge tax returns. Registered tax agents specialise in taxation accounting and have studied tax and law. They are eligible to provide tax services to the public as long as they renew their licence every three years. An accountant may be a registered tax agent

Accountant

Accountants manage a client's financial assets and provide relevant advice. An accountant may be a registered tax agent.

Insurance agent

Insurance agents represent insurance companies and sell clients' life, health, car and property insurance.

Lawyer

Family Lawyer - A family lawyer is a legal professional who concentrates on family and domestic matters. The most common cases for family lawyers revolve around divorce.

Corporate Lawyers – Corporate law covers the legal practice of companies, organisations and businesses. Corporate lawyers mainly work with large companies to ensure that regulations are followed.

Estate Planning Lawyer – A estate planning lawyer draws up wills that determine how a person's assets get passed on. They also assist in setting up family trusts to ensure the financial needs of minors are looked after.

General Practice Lawyer – A general practice lawyer is a legal practitioner who deals with a wide range of issues. They provide general advice on simple or generic issues.

Service Checklist

A service checklist can help clarify your client's current business needs and identify future requirements. Once you have this information, you can use it to assist you in creating a referral list for your clients. Your service checklist is not a static document. It will need to be updated as your business evolves. 

Watch

Watch the video by Andrew LaCivita, in which he speaks about business networking and how to build professional relationships.

Being relevant and understanding your clients' challenges is crucial if you want to provide a tailored service that is valued by the client and meets their needs.

What clients want in bookkeepers and accountants

• Accessible – Be available to them whenever they want
• Initiative – Suggest ideas that will help them grow their business
• Current – Embrace technology and changes in the industry
• Choice – Provide options and empower the client to choose
• Expertise – Specialist knowledge and qualifications
• Approachable - Relate in a way clients understand

Seeking regular feedback from clients may help improve your customers’ satisfaction levels.

There are three types of feedback customers can provide:

• Given feedback: When customers reach out without being asked to do so, they’re providing given feedback. A system should be implemented to analyse this data so that you can identify your client's most common questions and concerns.
• Requested feedback: Gather your customers’ thoughts and opinions by asking them directly. Once you create that open dialogue with them, be ready to take action. If they take the time to help your business improve, you must show them you are listening.
• Observed feedback: Watch how your customers use your product or service and what types of documentation they read. For instance, you might examine your website's most popular pages and search queries to gauge what interests your clients.

Ways of collecting feedback

Handling complaints

A complaint presents an opportunity for you to turn a poor client experience into a positive one. By handling complaints well, you’re more likely to encourage those clients to return to your business and prevent negative word of mouth. Ensure you are adequately handling customer complaints and dispute resolution. Having this process documented in internal policies and procedures can ensure that complaints are dealt with correctly and consistently.

Remember, complaints can be a valuable source of feedback for your business, so you may wish to keep a record of complaints to help you find areas needing improvement.

Measure your client service levels

Measuring your client's satisfaction levels is vital for ensuring that you’re meeting your clients’ needs.

Ways to measure your customer service levels:

• Asking clients after a service experience what their thoughts or opinions are on your business
• Asking clients to complete a feedback form
• Client questionnaires
• Reading online review websites or forums
• Observing interactions between employees and clients
• Monitoring response times

Measuring customer service is an ongoing and essential part of your regular client interactions.

Keep a record of interactions

Keeping a record of your client interactions as part of the sales process can help you build and maintain your client relationships. Keeping track of who, what, and when a client was contacted doesn’t need to be a complex system - it can be as simple as a Word document or a spreadsheet.

Microsoft has a range of templates that can be customized to track and illicit feedback from your clients.

As previously mentioned, members of the ICP and registered BAS and tax agents are bound by industry Codes of Professional Conduct.

When providing professional advice, employees in the financial services industry have a duty to provide advice and assistance which is competent and ethically sound. The client's interests are important, but there is a duty to act in the public interest, and not exclusively in the client's or employer's interests. 

Ethical conduct is doing what is right, good or fair in a specific situation. To demonstrate ethical behaviour, you must first weigh all relevant data, findings, and moral considerations (ethical values, standards, and obligations) before reaching a conclusion about what to do in specific situations or as a rule in your practice. 

Ethical considerations

• Avoid conflicts of interest
• Maintain your client's confidentiality 
• Avoid contributing to the perpetration of unlawful acts 
• Ensure your client is well informed; give comprehensive advice. 
• Ensure your client understands the advice and has the capacity to act 
• Be respectful. With older clients, beware of ageism and the assumption that, because the client is old and perhaps frail, they are incapable of making a valid decision. 
• Your client's best interests come first

Managing a conflict of interest example

Situation

Craig operates an IT business and wants to purchase an accounting software package to assist him in managing his business. He contacts his BAS agent Bradley and asks him to suggest a suitable accounting package. Bradley recommends Xero to Craig and suggests he could buy the software on his behalf. Bradley receives a monthly commission from Xero for every person he signs up to the Xero software.

Conflict of interest

Bradley has a financial incentive in suggesting Craig purchase Xero as opposed to another software package and, therefore, has a conflict of interest in the circumstances.

Managing the conflict of interest

Bradley appropriately discloses his conflict to Craig by advising him that he will receive a commission if he purchases Xero on his behalf. In this case, Bradley has satisfied his obligations under the TPB code of conduct by disclosing his conflict of interest to Craig when recommending Xero accounting software.

Ensuring your client is well informed and has the capacity to act example

Situation

Jackie owns and runs a local childcare centre. Jackie engages Taylor’s Accounting Servies to provide general and tax advice regarding the proposed sale of her childcare centre. Jackie does not want the staff to know that she is selling the service and has asked Taylor not to alert the staff to this. Jackie contacts Taylor and asks him to send a prospective buyer personal and payroll information about her employees.

Obtaining Staff Permission

Jackie's business is not legally required to comply with the Australian Privacy Principles because it is under the $3 million threshold. However, Taylor explains to Jackie that all businesses should aim to comply with the privacy principles as a matter of best practice. He suggests Jackie find out why the prospective buyer is requesting the information and discuss the request with the employees concerned.

Taylor also suggests Jackie included a procedure in her workplace privacy policy that documents the kinds of personal information her business holds, how the business collects and stores that information, and the purposes the information can be used for.

Watch

In the following video, Alan Nelson discusses ethical dilemmas in accounting.