How Do You Hold Your Bookkeeper Accountable?
For the business owner who has been managing their own books and thinks they have a good grasp on them handing over their QuickBooks file to someone else may be overwhelming. They may be worried about lack of control and for a small business owner that is completely understandable. For the business owner who normally has their CPA take care of their bookkeeping assigning the task to a bookkeeper may worry them.
Well now the business owner has an invaluable tool: The QuickBooks Audit Trail. The audit trail is just like any other report in QuickBooks except it details the life of a transaction. Every time that transaction is touched or changed by a user it is detailed in this report. Now that the IRS has authority to audit a QuickBooks file they find this report to be very useful. The audit trail cannot be turned off, so every move made in QuickBooks is tracked. Making lots of changes to a transaction can be a red flag to an auditor, but as long as your intentions are too correctly account for things the audit will go smoothly.
The audit trail is a great feature because it allows you to track what your employees are doing in QuickBooks. The more people working in the dataset the more likely someone will break something that another user has done. For example User 1 entered all of the handwritten checks the President has been writing out all month and books them appropriately. User 2 then goes in to the data to reconcile the last month and sees checks that were not on the bank statement, so User 2 deletes the checks. Now all of the work and job costing done with the checks when initially entered has been lost. Simply run an audit trail and then User 2 will be held accountable and will be trained correctly going forward.
Once your employees and bookkeepers know the audit trail is in place it will automatically discourage fraud, (for more on what causes fraud visit our blog post on fraud https://myrqb.com/blog/fraud-happen-prevent-it/ ) but there are a number of other factors you must consider that contribute to fraud. By reviewing your audit trail you could tell if someone is committing fraud by following their steps and thought process through their modifications.
If you’ve hired an outside company to do your bookkeeping the audit trail is your way of holding the company accountable. Take your dataset or print out a copy of the audit trail to bring to your CPA and review it with them, doing so may save you headaches and money down the line.
Contact us today at 866.567.4258 for a free demo to see how we can help you.
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