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Smart Workpapers Assignment
Accounting Information Systems (AFM272)
University of New England (Australia)
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REPORT ON SMART WORKPAPERS AND XERO INTEGRATION
Contents:
About Smart Workpapers p
Why use Smart Workpapers? How is it designed to help an accounting business? p
Smart Workpapers and Xero How do they work together and how could this benefit our firm? p
About Smart Workpapers
Smart Workpapers (the application) is part of the Smart Suite package provided by a company called Business Fitness. It is a package of electronic workpapers, worksheets and templates for accountants, said to be used by over by 10,000 Accountants Australia wide (Business Fitness, 2019).
Workpapers are essentially a collection of worksheets and reports prepared by accountants that support the preparation and validation of financial statements. They act as evidence of the workings behind each element of the financial statements and the checks made to ensure they are accurate and compliant. Workpapers are commonly prepared and populated by accountants, bookkeepers or accounts staff for review and sign off by auditors or partners.
There are a range of workpapers that a firm could use, depending on the nature of their clients, their business and other requirements. Commonly used workpapers are those for relating to year end accounting processes, tax and other liabilities. The Workpapers available upon purchase of the Smart Workpapers application cover: Division 7a (Anti avoidance provisions); BAS & IAS; Company Accounts & Tax; Capital Gains; Personal Income Tax; Salary Sacrifice; FBT; SMSF Compliance ; Privacy and Data Breachs; Advisory Tools and Firm Tools. Within these workpapers are multiple worksheets and checklists that can be populated and used as required.
The Smart Workpapers are automated templates with inbuilt calculations and checklists. They are set up / prepared by Certified Practicing Accountants (CPAs) and are updated on a monthly basis (through a monthly release of the software) to ensure that the calculations, text, checklists etc. within comply with legislative requirements and also reflect industry best practice. (Business Fitness, 2019)
Users login into the application via the web and select workpaper types to create for a client. The application requires an add-in to be loaded for Excel. Workpapers are then created in and run out of Microsoft Excel and can be accessed / shared between multiple users, for example, between those creating and those reviewing the workpapers. Smart Workpapers can also connect with cloud data files to enable automatic flows of data including from Xero (which will be discussed further shortly). Once you have set up a client in the index and
training videos available for the worksheets to ensure that new user can quickly get comfortable navigating the worksheets - these can simply be viewed via Business Fitness’ Learning page.
Having the workpapers run out of Excel also provides efficiencies because it is a well known program that doesn’t need to be re-learned by users. It also increases user’s ability to customise sheets if required.
Secondly it is also assisting the key accounting compliance function, by providing the CPA qualified IT resources to help build and ensure the papers and calculations reference the right accounting or tax legislation, rates, requirements - without the user needing to look these up or confirm. Business Fitness advertises Smart Workpapers as ‘industry gold standard for risk minimisation’ giving users ‘the peace of mind you’re working with 100% compliant tools at all times.’(Business Fitness, 2019)
There are inbuilt colour based flags in both the sheets and index pages that turn red when sheets don’t balance with a nominal threshold. This threshold is customisable for each client.
The data transmission to and from the application is encrypted and sent using HTTPS 256bit AES encryption in transit and Microsoft SSE encryption at rest (Business Fitness, 2019)
Some other design features are a chat style functionality for each worksheet that logs who has entered or changed data on the sheets and users can leave comments, as an audit trail. There is also a client index page for each client that shows which working papers are being prepared for that client and their status, which can assist in managing progress reporting. Users nominate other users for ownership of preparation and review of worksheets, which can inform workflow planning, even though the flow of tasks is manual. There are no automated notifications built in from a workflow perspective.
- Smart Workpapers and Xero – how do they work together and how could this benefit our firm?
Smart Workpapers can be used in with Xero through its ‘connected workpapers’ feature, which allows users to connect to clients Xero cloud based files and data, via the ‘manage connections’ link.
Once connected to the clients Xero account, client information in Xero is then directly populated into the workpapers – for example Trial Balance, General Ledger and BAS data. The connection is live, which means that that if information in Xero is updated, the updates flow through the workpapers without the need for re-keying.
Trial Balance data can be auto reconciled with worksheets or linked files with a reconciliations feature available in the connected workpapers. It will automatically flag if the Trial Balance data in Xero does not reconcile with the workpapers. This helps to quickly identify the Balance Sheet items that need to be reviewed and potentially adjusted.
The application of Smart Workpapers to Xero is that the workpapers act as a compliance check on the client data and records in Xero. There is no re-keying and data can remain live- when updated in the source accounting record system. Rather than having clients provide standalone Xero files, having Smart Workpapers as a workpaper preparation tool allows not only immediate access to the data, but it pulls the data down into prepared templates so that compliance and balancing checks can be done almost automatically. Only the areas not reconciling or showing non-compliance then need to be reviewed.
The efficiencies gained here for workpaper creation and data population are really clear and the integration provides a real time saving for data re-keying, as well as eliminating potential manual keying errors. It’s interesting to consider whether using outsourced, automated workpaper software which is ‘guaranteed’ to have its calculation outputs based correct rates rules and requirements, can actually claim to be a business process that achieves 100% compliance? Does having the prebuilt and automatic checks in Smart Workpapers truly guarantee that it will assist the accountants to achieve ‘100% compliance’ if the accounting data itself from Xero isn’t complete, correct, good quality or is fraudulent? The time savings
REFERENCES
Business Fitness. (2018). Good Bad Ugly of the Australia Accounting Industry ®: 2018 Benchmarking Report and Practice Improvement Guide for Australian Accounting Firms
Business Fitness. (2019). Smart Workpapers, Retrieved from: businessfitness.com/solutions/smart-workpapers/
Business Fitness. (2019). Online Support, Retrieved from support.hownowhq/support
Business Fitness. (2019). Smart Workpapers Video Library, Retrieved from: businessfitness.com/learning/smart-workpapers/
Oliver, B. (2018). Accounting meets the gig economy. Accounting Today, 32 (8), 31. Retrieved from: search.proquest.com.ezproxy.une.edu/docview/2101264661? accountid=
Parkes, A., Considine, B., Olesen, K Blount, Y (2017). Accounting Information Systems, 5th Edition, Wiley
Xero. (2019). App Marketplace , Retrieved from: apps.xero/au/app/smart- workpapers
Smart Workpapers Assignment
Course: Accounting Information Systems (AFM272)
University: University of New England (Australia)
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