Business or Bookkeeper: Who Should Handle Source Documents?

Managing source documents—such as bills, receipts, checks, or any records that substantiate a transaction—is essential for compliance in small businesses. These documents are crucial for accurate and efficient bookkeeping, ultimately providing valuable business insights.

However, managing source documents can raise several questions regarding best practices. Traditionally, collecting and managing these documents required significant administrative effort and storage space—up to 25% of an office's space might be dedicated to paper storage!

Bookkeepers are ideally positioned to help their clients manage these documents more effectively. Let’s explore why this is and how to handle it.

Should Businesses or Bookkeepers Manage Source Documents?

The nature of the relationship between business owners and their outsourced bookkeepers can vary. A straightforward way for bookkeepers to enhance client relationships is by taking over administrative tasks like document management.

Discussions with leading bookkeeping professionals reveal that bookkeepers who assist small business clients in collecting and managing source documents tend to have stronger relationships. This approach not only helps small businesses with compliance—such as during routine audits—but also improves the accuracy of reconciliation, leading to more meaningful business insights. Clients satisfied with these services are more likely to subscribe to additional bookkeeping services.

This doesn’t mean that business owners should neglect their role in tracking source documents. Since these documents are integral to the bookkeeping process, bookkeepers should take the lead in assisting their clients with document management.

The Importance of Source Documents in Bookkeeping

Source documents are vital for business compliance and audit preparation. It’s essential to understand the documentation required to remain compliant in various regions (e.g., the United States, Canada, Australia, New Zealand, and the United Kingdom).

Source documents also enhance the quality of bookkeeping. The best bookkeepers avoid reconciling directly from bank statements when possible, instead verifying each transaction with a source document. Having these documents readily available streamlines the reconciliation process, making it faster, easier, and more accurate. This clean data can then be transformed into actionable business insights.

How to Efficiently Collect and Manage Source Documents

One of the best ways to manage source documents is through digitization. Implementing technology to automate and digitize document management offers numerous benefits—from disaster-proofing to reducing physical storage space and facilitating remote work. A centralized system for digitizing and collecting source documents ensures that all documents are readily available when needed.

Zapier Desk is a tool that aids both bookkeepers and business owners in reaping these benefits. With features like a mobile app, intake email, integration with Fujitsu ScanSnap, and automated connections, Zapier Desk simplifies the process of collecting and digitizing documents. Documents added to Zapier Desk are automatically filed and easily searchable, keeping them at your fingertips.

Moreover, Zapier Desk integrates with cloud storage platforms (e.g., Box, Dropbox, ShareFile, SmartVault, Google Drive) and provides the option to push documents to Xero Files, ensuring redundant backup for easy client access. Integration with cloud accounting platforms like Xero allows you to publish source documents to create and match transactions in the bank feed, with the source document automatically attached.

Transitioning to digital document collection may necessitate some adjustments in management. You'll need to ensure that both your staff and clients understand the value and are trained in their responsibilities within the system (e.g., clients might need to start taking photos of receipts while on the go).

Alternatively, by implementing tools like Zapier Desk, clients can continue submitting paper documents while your firm handles digitization, offering even greater value.

Are Digital Documents Acceptable for Audits?

Yes! Digital files are acceptable as source documents in the event of an audit in many countries, including the United States, Canada, Australia, and the United Kingdom. We recommend reviewing local government regulations to ensure compliance with record-keeping standards.

Having a digital and centralized system for document management can also provide peace of mind for clients worried about tracking documents for audit purposes. In an audit scenario, having all documents readily available in one place helps ensure a smooth process.

How to Start Using Zapier Desk for Source Document Management

Accounting and bookkeeping practices are eligible for a free Zapier Desk partner account!

With this account, you can start uploading receipts via our mobile app, collect documents through email, set up automated connections to fetch documents, and experience the power of automated data extraction. We encourage using Zapier Desk in your own practice to evaluate its fit for your clients.

Bookkeepers who assist their clients in digitally managing source documents provide additional value. Moreover, you'll position yourself as an advisor, helping clients transition to a more digitally-enabled world!