Why Reviewing Your Bookkeeper's Work Matters — Even a Good One
Outsourcing bookkeeping does not mean handing over responsibility for your financial records. As the business owner, you are legally responsible for the accuracy of your BAS, payroll obligations, and financial statements — regardless of who prepared them. A monthly review takes 20–30 minutes and catches errors before they compound.
This guide applies whether your bookkeeper is Indian or local. The review process is the same — it is good financial governance for any business. The difference with offshore bookkeeping is that errors may go undetected longer if you are not actively reviewing, because there is no local person who might notice a problem by chance.
The Monthly Review — 5 Checks That Take 20 Minutes
Check 1 — Bank Reconciliation
In Xero: Reports → Account Transactions → select your bank account → check the closing balance matches your actual bank statement for the last day of the month.
- Xero bank balance = bank statement balance to the cent
- Zero items in "Needs Attention" older than 7 days
- No transactions coded to "Suspense" or "Ask My Accountant" that are older than the current month
- Bank feed is connected and current — no gap in transactions
Check 2 — P&L Sense Check
Run the Profit and Loss report for the month. Ask yourself: do the revenue and expense figures look right relative to your trading? Common issues to spot:
- Revenue that seems too low — could mean some sales were coded to a liability or balance sheet account instead of income
- An expense category that is much higher or lower than expected — could signal a double-entry, miscoding, or a missed invoice
- A large "Other Income" or "Other Expense" entry — ask what it is
- Payroll figures that don't match what you know you paid
Check 3 — BAS Verification
Before signing off on any BAS draft, verify two figures:
- G1 (Total sales): Should match your total revenue on the P&L for the BAS period, plus any capital asset sales
- 1A (GST on sales): Should be approximately 1/11th of your taxable sales. If your business is 100% taxable, this is simply revenue ÷ 11. If you have a mix of taxable and GST-free supplies, it will be less — your bookkeeper should be able to explain the split
- 1B (GST credits): Run the GST Audit report in Xero and spot-check the 5 largest input tax credits — are they legitimate business expenses with valid tax invoices?
Check 4 — Payroll YTD
Quarterly, run the Payroll Activity Summary report in Xero (Reports → Payroll → Payroll Activity Summary). Check:
- Total gross wages match what you approved in each pay run
- PAYG withholding total matches what has been paid or is owed to the ATO
- Superannuation YTD per employee — has it been paid on time? Under Payday Super (from July 2026), super must clear within 7 business days of each pay run
- STP YTD figures in Xero match the Payroll Activity Summary (they should, but check if there have been any manual adjustments)
Check 5 — Balance Sheet Review
Run the Balance Sheet once a quarter. Look for:
| Balance Sheet Item | What to Check |
|---|---|
| Bank accounts | Should match actual bank balances — same as Check 1 |
| Accounts receivable | Are aged debtors growing? Invoices over 90 days — are they real or should they be written off? |
| Inventory | Should not be negative. Should approximate your actual stock on hand |
| Accounts payable | Does it match what you actually owe suppliers? No ghost invoices? |
| GST liability | Should reflect the BAS amount payable for the current period — not a large accumulated balance |
| PAYG withholding payable | Should be cleared at the end of each BAS period — not growing |
| Suspense / clearing accounts | Should be zero or near zero — any balance needs explanation |
| Owner equity / retained earnings | Should grow or shrink in line with profit/loss — a large unexplained movement is a red flag |
Red Flags — When to Be Concerned
- Bank reconciliation not completed within 5 days of month end — or not provided at all
- Unreconciled items older than 30 days — left unresolved month after month
- Suspense or "Ask My Accountant" accounts with growing, unexplained balances
- GST on sales (1A) doesn't approximate 1/11th of taxable revenue — with no explanation
- Payroll YTD doesn't match STP year-to-date figures
- Negative inventory or impossible balance sheet figures
- They never proactively flag issues, ask questions, or raise potential problems — a good bookkeeper finds things
- Vague or deflecting answers when you ask about a specific transaction
- BAS lodgement is late because the file wasn't ready in time
- You can't get a clean month-end report within 7 business days of month end
Questions to Ask Your Bookkeeper Each Month
A good Indian bookkeeping firm should proactively answer these — but if they don't, ask:
- "Is the bank reconciliation complete and balanced for last month?"
- "Were there any transactions you couldn't code — anything sitting in suspense?"
- "Is there anything unusual in the P&L this month I should know about?"
- "Are there any supplier invoices you are waiting on that could affect the BAS?"
- "Is the super paid and cleared for the last pay run?" (Post Payday Super)
- "Any concerns going into next quarter?"
When to Involve Your Australian Accountant
Your Indian bookkeeper handles the day-to-day books. Your Australian accountant (CPA or CA) handles tax strategy, income tax return lodgement, and complex compliance decisions. Involve your Australian accountant if:
- You find a recurring coding error that has affected multiple BAS periods — an amended BAS may be needed
- There is a large unusual transaction (asset purchase, loan, related party payment) that needs tax advice before it is coded
- Year-end is approaching and you want the file reviewed before the tax return is prepared
- You are considering a structural change (trust, company, trading entity restructure) — tax implications must be assessed first
- You receive an ATO audit notice or correspondence — do not respond without accountant involvement
See our ATO compliance guide for what your Indian bookkeeper is and is not responsible for, our hiring guide for what to look for in a quality Indian firm, and our switching guide if you are moving from a local bookkeeper.
Written by Sharma Jyoti, CA (ICAI). We provide monthly management reports, bank reconciliation confirmation, and a proactive issue-flagging process to every Australian client — so you can review our work in 20 minutes each month. See how we work →
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