Managing Workpapers, Source Documents & Client Folders

I recently received an SOS from a bookkeeping client who had hit panic mode because they'd been selected for an audit – and hadn't kept any records on hand.

Audits are one of those things - even when confident they're in the clear, the mere whisper of an audit has the ability to elicit instant panic in a client. And while it’s the business owner’s responsibility to keep records, if the audit trigger is pulled, us bookkeepers and accountants are the first call they make.

It's during these times that the strength of our operational processes and systems are really put to the test. This includes what I consider to be a key pillar of our craft – workpaper management. Having strong systems in place to effectively and efficiently maintain and manage records and source documentation not only helps with day-to-day client management - it also pays dividends if/when you need to access these records for things like audits or dispute resolution.

Here's what I consider to be some of the key elements of effective workpaper management

• Be consistent and systematic in how you set up and maintain your documentation - folder/filing structure, naming conventions, staff training procedure, review schedules, and notations should all be approached in the same way so they are accessible and easy to navigate/interpret.
• Keep everything in the same place - I created a Workpapers Management Template to keep a master document of all my workpapers and client files in the one location. I still keep all my source documentation and reports in the client folder, though use this template to record it all in one spot, with links to folders, video/meeting recordings/minutes, screenshots, report exports and notations.
• Don't skimp on the detail - use your workpapers to keep a record of all the assumptions, events/scenarios, notes and calculations that you or your team have used to perform the task. This makes it easy to check back on work, review a team members work, or refer back to why/how you came to the conclusions you did if it ever comes into question.
• Leverage tech - it doesn't need to be fancy, though the more you can integrate and automate your systems the better. There are some good apps available that can help manage workpapers, though you can also set up an Excel spreadsheet or Google sheet to manage it.

Academy members can jump into the Workpapers Management module here to access the Workpapers Management template, along with other practical resources to help maintain client folders and records. If you're not yet a member - head here for more info.