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Bookkeeping: Past and Present
How it all began
Over 500 years ago, Luca Pacioli, an Italian mathematician and Franciscan friar who worked with Leonardo da Vinci, wrote about a double-entry bookkeeping system, where every single debit value must have a corresponding credit. It was generally accepted that the merchants in the Italian cities had to use a similar accounting system for centuries. Still, Luca’s publication is a breakthrough in bookkeeping history.
Bookkeeping has constantly been about recording and organizing all the financial transactions passing through a business. Usually, bookkeepers wrote these in journals, cashbooks, or daybooks and afterward transferred them to a ledger, so a bookkeeper was known as a “keeper of the books.” Though bookkeeping and accounting software has now extensively replaced the need to keep manual records, a bookkeeper still needs to enter all the transactions into the software system and implement the required reconciliations to ensure the information is accurate. As a result, the business is compliant with the law.
The kinds of entries a bookkeeper would usually deal with are:
Sale and purchase invoices, payments, and receipts
Reconciliations of bank and credit cards accounts
GST reporting
Business management reporting
Payroll and leave management and keeping employee records
The modern-day bookkeeper
Today, the modern-day bookkeeper covers all day-to-day bookkeeping tasks but utilizes technology to automate as much bookkeeping work as possible. This means that the focusfor the contemporary bookkeeper has changed from data entry to:
Helping the business understand its financial information
Improving business systems
Validating the data and reporting essential information about business operations
Handling technologies and software systems to ensure they are operating as required
Determining that the business remains compliant with legislation
A Certified Bookkeeper with a membership must guarantee businesses that they are working with bookkeepers’ skills have been tested by an association and must comply with our strict Code of Ethics. In addition, as a Certified Bookkeeper who is a member of an association, also receive the backing of other bookkeepers through local networking events and annual conferences. They are kept entirely up to date by the Association’s webinars and newsletters.
When you appoint a bookkeeper, who is a Certified Bookkeeper, you can expect them to:
Communicate frequently and efficiently with your business. This will endorse that you are absolutely up to date with your business transactions and enables to be quickly resolved problems.
On-time delivery of the output of their bookkeeping work so that you see the value ofthe service being delivered.
Possess a high degree of efficiency, integrity, and ethics.
Must also know levels of certification the bookkeeper has; this will establish theirbookkeeping skills:
As well as being a Certified Bookkeeper member of an association, bookkeepers may also be registered with Inland Revenue Department (IRD) to be Bookkeeper Agents or Tax Agents and can be a member of the Tax Agents Institute New Zealand as well. The differences are clarified in the section below:
In 2019, IRD introduced a Bookkeeper Agent status, recognizing the worth of bookkeepers adding value to New Zealand businesses. This is for bookkeepers that look after GST and PAYE commitments but do not file Income tax returns for businesses. It empowers bookkeepers to act and communicate with IRD on behalf of the businesses and better indicates GST and PAYE commitments and balances.
To become a Bookkeeper Agent, a bookkeeper must have the following:
A minimum of ten clientele for whom they will act for, for GST or PAYE, having signed letters of authority
Sign a statutory statement and undertake a person-to-person interview with IRD
The bookkeeper must be tax compliant.
Bookkeepers who prepare the annual tax returns for ten or more taxpayers can apply as Tax Agents with IRD. This means that they can act on a clientele’s behalf for all tax and social policies.
To become a Tax Agent, a bookkeeper must have the following:
A minimum of ten clientele for whom they act for to file income tax returns, having signed letters of authority
Sign statutory statement and undertake a person-to-person interview with IRD
The bookkeeper must be tax compliant
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