Bookkeeping and accounting

Bookkeeping is recording money in and out so that a business can see where it stands.

• Learn the terms: asset, liability, equity, income, expense, debit, credit, ledger, invoice, receipt.
• Assets are what a business has; liabilities are what it owes; equity is what is left.
• Every entry has two sides: a debit and a credit that are equal.
• Bookkeepers record; accountants and tax advisers give advice. Know the difference.
• Sort fifteen transactions into asset, liability, equity, income or expense.
• Describe the debit and credit for a sale paid in cash and for a bill paid later.
• Explain why a bookkeeper does not give tax advice and who does.

Activity. Write ten terms with an example each and sort 15 transactions into income or expense.

Standard to meet. Task: sort and define. Condition: from a list, no help. Standard: all terms plain and correct and 15 of 15 transactions sorted.

The books follow a path. If you can name it, you can keep it tidy.

• The path: collect documents, record, categorise, reconcile, review, report.
• A chart of accounts is the list of categories used for all entries.
• Reconcile means compare your books to the bank statement and explain each difference.
• Keep a file for every document: receipts, invoices, bank statements.
• List the documents for one month: bank statement, sales invoices, bills and receipts.
• Draw the path from document to report as a one-page flow chart.
• Check that every bank line has a document behind it.

Activity. Set up a chart of accounts for a small shop and trace five transactions through it.

Standard to meet. Task: trace five transactions. Condition: using a sheet or free practice file. Standard: each entry is balanced and has a document.

Now you do the work. Enter a month of transactions and prove the books agree with the bank.

• Enter income and expenses with the date, who, what, amount and tax.
• Categorise the same way each time.
• Reconcile the bank each month; list every difference and fix it.
• Produce a simple profit and loss and a list of who owes the business and whom it owes.
• Compare total income and expenses in the books with bank deposits and withdrawals.
• Flag any entry without a document and ask the client for it.
• Check the tax amount on each entry against the invoice.

Activity. Complete one month of practice books and a reconciliation.

Standard to meet. Task: complete one month of books. Condition: from provided documents in three hours. Standard: debits equal credits, bank reconciled, and reports show a correct profit.

Canadian businesses have sales tax, payroll and record rules. Learn where they touch the books.

• GST/HST and some provincial sales taxes may apply; registration depends on sales and rules. Check the current limits and rates with the tax agency.
• If a business pays staff, it must withhold and send deductions to the tax agency by their due dates. Check the current rules.
• Business records are generally kept for six years; check the current rule.
• Keep client information private and give tax or legal advice only if you are qualified. Professional titles for accountants are protected; use only titles you hold.
• List which clients collect sales tax and note each filing date.
• Ask the tax agency for the due date of payroll remittances and write it down.
• Design a folder system that holds six years of records and check the current retention rule.

Activity. Build a table of tax or record item, who sets it, due date and where you checked, for ten items.

Standard to meet. Task: build a tax and records table. Condition: using official public pages. Standard: each row has a dated source and unclear items say 'check the current rule with the local authority'.

You are paid for accuracy and time. Work out what each client really costs you.

• Time includes collecting documents, chasing missing items, entering, reconciling and questions.
• Compare hourly, monthly fixed fee and per-transaction pricing.
• A fixed fee needs a clear scope: number of transactions, accounts and reports.
• Track hours per client to see if the fee is fair.
• Calculate your hourly break-even from yearly costs and your pay target.
• Compare a fixed fee with hourly time on the same client.
• Add a rule for extra work: transactions above the agreed number cost extra.

Activity. Time three practice clients and set a monthly fee for each.

Standard to meet. Task: price three clients. Condition: from your time log. Standard: hours, rate and fee are shown and a mentor can follow every number.

Software saves time. Clients come from trust.

• Use accounting software with a bank feed and a clear audit trail; practise on a demo file.
• Check each automated entry. The software suggests, you decide.
• Reach local small businesses, with consent, and offer a free 20-minute review of their record keeping.
• Ask permission before using any client example, and remove names.
• Set up a demo file with a chart of accounts and import a sample bank file.
• Create a software rule and check it files five test items correctly.
• Draft a short message offering a free 20-minute review of record keeping.

Activity. Practise software on a demo file and contact ten small businesses.

Standard to meet. Task: practise and reach out. Condition: demo data and consent-based contact. Standard: ten entries checked, ten contacts made and replies logged.

Bookkeepers hold private financial information.

• Keep client files in a secure place with strong passwords and two-step sign-in.
• Back up data and test that you can restore it.
• Use a second check on large or unusual payments.
• Write an engagement letter that lists scope, fees, deadlines, who is responsible for what and how you keep information private.
• List who has access to each file and remove access when a client leaves.
• Practise a restore from backup each quarter and record the result.
• Describe what you do on finding a mistake in a filed return: tell the client and a tax professional.

Activity. Write an engagement letter and a monthly close checklist.

Standard to meet. Task: produce a letter and checklist. Condition: reviewed by a mentor. Standard: scope, fees, deadlines and privacy are stated in plain words.

Now you run it, measure and decide.

• Set a goal such as two clients and two monthly closes.
• Each week record hours, income, errors found and late items.
• Ask each client for feedback.
• Choose at the end: stop, change or grow, and write a 12-month plan.
• Calculate your effective hourly rate as income divided by hours.
• List the errors found and fix the step that caused each.
• Evaluate whether a third client fits your hours.

Activity. Run the pilot and present a 12-month plan to a panel of three.

Standard to meet. Task: run a 60-day pilot. Condition: real or practice clients with a signed letter. Standard: log complete, reconciliations clean and the decision uses numbers.

L1: Finance aware learner. You can define: name the main terms, people and rules of bookkeeping and accounting. Focus module: Know the words of bookkeeping (Understand, 6 h). Bookkeeping is recording money in and out so that a business can see where it stands. Key points: Learn the terms: asset, liability, equity, income, expense, debit, credit, ledger, invoice, receipt. Assets are what a business has; liabilities are what it owes; equity is what is left. Every entry has two sides: a debit and a credit that are equal. Bookkeepers record; accountants and tax advisers give advice. Know the difference. Sort fifteen transactions into asset, liability, equity, income or expense. Describe the debit and credit for a sale paid in cash and for a bill paid later. Explain why a bookkeeper does not give tax advice and who does.

Speaker notes. Teach: open with the worked example. The business buys a printer for $300 cash. Debit equipment $300, credit cash $300, so both sides equal 300. A sale of $150 paid in cash is debit cash $150, credit sales $150. Then set the activity: Write ten terms with an example each and sort 15 transactions into income or expense. Mark against the standard: Task: sort and define. Condition: from a list, no help. Standard: all terms plain and correct and 15 of 15 transactions sorted. Check at this level: What are assets, liabilities and equity? Model answer: What a business has, what it owes, and what is left. Level note: Start here if new. Evidence: a one-page glossary and a visit or interview note.

L2: Clerk or assistant. You can describe: explain how bookkeeping and accounting works from first contact to result. Focus module: Explain the books from receipt to report (Apply, 6 h). The books follow a path. If you can name it, you can keep it tidy. Key points: The path: collect documents, record, categorise, reconcile, review, report. A chart of accounts is the list of categories used for all entries. Reconcile means compare your books to the bank statement and explain each difference. Keep a file for every document: receipts, invoices, bank statements. List the documents for one month: bank statement, sales invoices, bills and receipts. Draw the path from document to report as a one-page flow chart. Check that every bank line has a document behind it.

Speaker notes. Teach: open with the worked example. Bank balance $1,200; books $1,050. A cheque for $150 has not cleared, so 1,200 - 150 = 1,050 and the books match. Write the $150 on the reconciliation as outstanding and clear it next month. Then set the activity: Set up a chart of accounts for a small shop and trace five transactions through it. Mark against the standard: Task: trace five transactions. Condition: using a sheet or free practice file. Standard: each entry is balanced and has a document. Check at this level: What is a reconciliation? Model answer: Comparing the books to the bank and explaining each difference. Level note: Evidence: a flow chart and a two-minute spoken explanation.

L3: Bookkeeper or junior analyst. You can apply: carry out a routine task in bookkeeping and accounting to a written standard. Focus module: Record and reconcile to a standard (Apply, 10 h). Now you do the work. Enter a month of transactions and prove the books agree with the bank. Key points: Enter income and expenses with the date, who, what, amount and tax. Categorise the same way each time. Reconcile the bank each month; list every difference and fix it. Produce a simple profit and loss and a list of who owes the business and whom it owes. Compare total income and expenses in the books with bank deposits and withdrawals. Flag any entry without a document and ask the client for it. Check the tax amount on each entry against the invoice.

Speaker notes. Teach: open with the worked example. A month: income $4,200, expenses $3,100, profit 4,200 - 3,100 = $1,100. The bank is reconciled with zero unexplained difference. If expenses had been $3,250, profit would be $950. Then set the activity: Complete one month of practice books and a reconciliation. Mark against the standard: Task: complete one month of books. Condition: from provided documents in three hours. Standard: debits equal credits, bank reconciled, and reports show a correct profit. Check at this level (this question is covered in module 1: Know the words of bookkeeping): What does every entry have? Model answer: A debit and an equal credit. Level note: Evidence: a supervised task record that meets the standard once.

L4: Accountant or adviser. You can analyse: diagnose why a bookkeeping and accounting result missed its target and fix it. Focus module: Follow Canadian tax and record rules (Evaluate, 8 h). Canadian businesses have sales tax, payroll and record rules. Learn where they touch the books. Key points: GST/HST and some provincial sales taxes may apply; registration depends on sales and rules. Check the current limits and rates with the tax agency. If a business pays staff, it must withhold and send deductions to the tax agency by their due dates. Check the current rules. Business records are generally kept for six years; check the current rule. Keep client information private and give tax or legal advice only if you are qualified. Professional titles for accountants are protected; use only titles you hold. List which clients collect sales tax and note each filing date. Ask the tax agency for the due date of payroll remittances and write it down. Design a folder system that holds six years of records and check the current retention rule.

Speaker notes. Teach: open with the worked example. A client asks if a car expense is fully deductible. You write the question, the amount and the date in a questions list and refer it to a tax professional. If the car costs were $2,400 for the year, you record $2,400 in the car expense account and let the professional decide how much is deductible. Then set the activity: Build a table of tax or record item, who sets it, due date and where you checked, for ten items. Mark against the standard: Task: build a tax and records table. Condition: using official public pages. Standard: each row has a dated source and unclear items say 'check the current rule with the local authority'. Check at this level: How long are business records generally kept? Model answer: Generally six years; check the current rule. Level note: Evidence: a fault or gap analysis with a fix and a repeat test. This course targets this level.

L5: Senior adviser or manager. You can evaluate: judge options for bookkeeping and accounting against cost, risk and quality. Focus module: Use software and find clients (Create, 6 h). Software saves time. Clients come from trust. Key points: Use accounting software with a bank feed and a clear audit trail; practise on a demo file. Check each automated entry. The software suggests, you decide. Reach local small businesses, with consent, and offer a free 20-minute review of their record keeping. Ask permission before using any client example, and remove names. Set up a demo file with a chart of accounts and import a sample bank file. Create a software rule and check it files five test items correctly. Draft a short message offering a free 20-minute review of record keeping.

Speaker notes. Teach: open with the worked example. The bank feed suggests 'office' for a grocery bill. You change it to 'meals' after checking the receipt. If the feed brings 60 lines and you find 6 wrong, that is 6 / 60 = 10%, a good reason to review every line. Then set the activity: Practise software on a demo file and contact ten small businesses. Mark against the standard: Task: practise and reach out. Condition: demo data and consent-based contact. Standard: ten entries checked, ten contacts made and replies logged. Check at this level: Who decides a category the software suggests? Model answer: The bookkeeper, after checking the document. Level note: Evidence: an options paper with numbers and a recommendation defended to a panel.

L6: Head of finance. You can create: design and pilot a new offer or process in bookkeeping and accounting. Focus module: Protect clients, data and accuracy (Evaluate, 6 h). Bookkeepers hold private financial information. Key points: Keep client files in a secure place with strong passwords and two-step sign-in. Back up data and test that you can restore it. Use a second check on large or unusual payments. Write an engagement letter that lists scope, fees, deadlines, who is responsible for what and how you keep information private. List who has access to each file and remove access when a client leaves. Practise a restore from backup each quarter and record the result. Describe what you do on finding a mistake in a filed return: tell the client and a tax professional.

Speaker notes. Teach: open with the worked example. Your letter says: 'The client provides all documents by the 10th. The bookkeeper reconciles by the 20th.' That gives 20 - 10 = 10 days for the work. You also set a limit you choose, such as a second check on any payment above $5,000. Then set the activity: Write an engagement letter and a monthly close checklist. Mark against the standard: Task: produce a letter and checklist. Condition: reviewed by a mentor. Standard: scope, fees, deadlines and privacy are stated in plain words. Check at this level: Why test a restore? Model answer: A backup you have not tested may not work. Level note: Evidence: a pilot with measured results over at least 30 days.

L7: Partner or chief officer. You can lead: run a team or business in bookkeeping and accounting and develop others. Focus module: Run a real bookkeeping practice for 60 days (Create, 8 h). Now you run it, measure and decide. Key points: Set a goal such as two clients and two monthly closes. Each week record hours, income, errors found and late items. Ask each client for feedback. Choose at the end: stop, change or grow, and write a 12-month plan. Calculate your effective hourly rate as income divided by hours. List the errors found and fix the step that caused each. Evaluate whether a third client fits your hours.

Speaker notes. Teach: open with the worked example. After 60 days: 2 clients, 14 hours, $560, no unexplained bank differences. Your rate is 560 / 14 = $40 an hour, equal to your target. You plan to add a third client. Then set the activity: Run the pilot and present a 12-month plan to a panel of three. Mark against the standard: Task: run a 60-day pilot. Condition: real or practice clients with a signed letter. Standard: log complete, reconciliations clean and the decision uses numbers. Check at this level (this question is covered in module 2: Explain the books from receipt to report): What is a reconciliation? Model answer: Comparing the books to the bank and explaining each difference. Level note: Evidence: a record of results over a year and of people you have coached to a higher level.