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Is it the normal role of the bookkeeper to make the GJ entry for financed assets due to the funds being paid directly from the financier to the supplier? The reason for my question is: Over my years as a bookkeeper, the purchase details and leasing contract/agreements were always provided to the accountant at the end of the financial year for them to 'in turn' provide me a one-off GJ EOFY adjustment summary for entry. Also, the monthly direct debits for these purchases are being reduced each month via the entry for the entirety of the agreement. For example, our MYOB entry for a 60-month contract would look like the below example but must be altered on each monthly payment over the duration of the agreement. I.e. the interest component would decrease until the final direct debit interest entry would be zero. This, I find very time consuming Especially when you have multiple contracts, where I believe this can be entered 'once only' as part of the EOFY GJ Movement entry provided by the accountant. I would like to know if this is now a common thing bookkeepers now look after? Another reason for this query, there was a period where a few bookkeepers worked in this position for a few short periods and never took over the original practice of the interest being reduced monthly, and when I came along it wasn't til a few months later that I actually discovered it. Anywho, its all totally out of whack now - hence why I think it should be the workings out of the accountant at the EOFY. All feedback appreciated - thank you
Photo 1 - Example of Monthly Direct Debit entry
Photo 2 - Example of initial GJ entry
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Although I cant speak for bookkeepers as a whole, I’m of the understanding it would depend on the accountant and bookkeeper themselves as some bookkeepers may prefer to do it and provide the information to the accountant, whilst some accountants may prefer to look after it themselves.
In terms of the journal entries themselves, this is definitely something that Id talk to your accountant over in terms of how they want to fix the entries and the best journal entries to do so, particularly if there are any tax implications involved in these entries.
I am very much of the opinion that adjustments to Interest is an end of year event and best left to the accountant. There is nothing to be gained by putting through monthly journals and, if anything, it smacks of 'I will do it because I can make it look as though I have done more work'. As @Chelbelz also points out the more entries the greater the chance of error.
Thank you. I appreciate both responses.
We pay our accountant a hefty monthly sum and of course the annual fee on top. This job will be handballed back to the accountant.