Some background: I am a CPA specializing in tax accounting. I do a ton of work for small businesses and their owners. This time of year is hectic to say the least. I really enjoy my job and take satisfaction in helping my clients pay only the amount in taxes that is legally required of them.
Now on to the griping - a lot of these small business clients do not have a professional bookkeeper on staff. Because of their size and monetary constraints, a lot of the owners do the bookkeeping themselves or have their spouse do it, or hire a lowly paid part time worker to enter the transactions into their Accounting software of choice. My firm has a fully staffed bookkeeping department that has been offered to each of these clients, but it is understood that they do not want to pay the fees.
However, for the love of god, when you are not a trained accountant or even a bookkeeper, please do not bitch and complain at me when come tax time all you give to me is your yearly general ledger and financial statements with no backup documentation and I have to send you an email with a huge list of questions and items needed to complete your tax return. I am trying to help you! Because you are not willing to put in a memo on a transaction for what the payment was for, guess what, i might have to ask you about it! Shocker i know. Just because you do not understand what difference it makes what type of insurance you cut a check to an insurance company was for, doesn’t mean it isn’t important! Lumping your life insurance, your health insurance, your employees’ health insurance, your workers comp insurance, etc into one expense account called “insurance” with no detail on any of the transactions, means you are going to have to go back and and identify all these transactions. This applies to a ton of other examples as well. We go through this every year. You would think you would realize that i spend more time that is needed analyzing every damn transaction to make sure you posted it right, and that you spend more time than is needed going back through your records to identify everything that you could have just hired a professional to do your bookkeeping in the first place and it would not have cost you any more money! My hourly billing rate is a whole damn lot higher than theirs!
I know it is not my money, but I get so tired of clients that i like personally wasting time and money for no good reason. My job is to find ways to save you money. I am not the enemy so stop treating me like one! Unless you are perpetrating criminal fraud or embezzlement, there is no good reason why you should get pissy with me about asking for details about your books. Many of these clients have very profitable businesses they run, which makes it all the more baffling on how they do their bookkeeping.
Also, it might not hurt to give me a call before you do anything that might in any way significantly affect your business from a financial standpoint. There might be tax implications you do not know about. I just had to call a client yesterday to let them know that they could have avoided over 80,000 in capital gains on a piece of property they sold if they had called me first. They could have done a like-kind exchange but they had never even heard of it and knew nothing about it. Sigh.
Anyway, just needed to get that off my chest during tax season. I know this probably sounds like really whining over minor stuff, but it just gets on my nerve so often.
Have you tried marketing your services outside of tax prep? Many business owners equate accountants to taxes only. Maybe a well thought out presentation of your services, with compelling, cost saving examples would sway your customers to expand their interest in the bookkeeping side of your business.
This is, of course, tax preparers hell month (more or less). Our accountant has saved us bundles of money over the years and he’s been worth every penny we’ve paid him.
I have, on occasion, been the “lowly employee” who handled the company bookkeeping, a thankless task, I assure you. Even if said amateur bookkeeper is a reasonably competent person, there’s the problem of the boss or other employee not being on board with documenting stuff. Where I work now my bookkeeping tasks are minimal, and I strive to keep every single receipt and document everything I can (“Broom, are you writing another novel on a transaction?”) but I can’t control the rest of the crowd, the illiterate employee who never wrote anything down because she wanted to hide that she can’t write much more than her name, the embezzling employee, the airhead who is too busy/distracted to remember to write down even half as much as needed, the druggie who would scrawl an entry illegibly then crumple up and throw out the primary documentation like receipts and invoices, and so on and so forth.
I really feel sorry for the co-owner who takes on the accounting issues where I work. I always expect to see her with a bruised forehead from doing the head-desk dance this time of year.
Yes our firm heavily markets our services. We also have a financial investment services department with employees who hold their series 6 and series 7 licenses, a real estate department with fully licensed real estate agents, the bookkeeping / payroll department with licensed payroll specialists in addition to the CPA’s, Certfied Financial Planners and EA’s in our Tax and Assurance departments. This all in one aspect of our firm is what really separates us from most other small to mid size CPA firms, so it is heavily marketed to all of our clients.
Thanks Broomstick. I do appreciate good bookkeepers, they make everybody’s life easier. Small businesses have to be really careful with hiring someone for that position though. Just last year our firm took over the bookkeeping duties of a new (to us) client and discovered the former in house bookkeeper had been embezzling money from the client for 7 years to the tune of over 300,000. The owner had given her check writing capability, full bookkeeping duties and in charge of all the bank statements with no oversight- a recipe for disaster. She got sentenced to 5 years in the pokey and monetary payback, but they will never get anywhere close to all that money back.
Something like that should never happen, but sometimes it is really easy at small businesses with owners who do not want to pay attention to the accounting side of the business and put their trust in 1 person to handle everything.
Have you considered attaching an extremely polite note to the returns of the worst offenders? Something that goes with the bill and implies the cost of your services is impacted by the time it takes to unravel, blah, blah. A form letter with room for you to write in specific examples from their return, where time could have easily been saved had the client entered specifics when entering certain payments. Limit yourself to three suggestions no matter how poorly organized it is, and even that is pushing it for folks like this.
Do you, in fact, charge the well organized client less if you don’t have to search around for the info you need? If so, I think it’s a good carrot to use to get clients to participate more.
Of course you’re aware there are always people who can never be changed, I know!
Yeah they know exactly how much extra money it is costing them with all the extra time I or one of my associates spends on their bookkeeping. We itemize our bills for our business clients (individual returns are usually an agreed upon flat fee unless something unusual comes up that requires extra time than expected), so they can see exactly how much extra it is costing them. Some clients its around an extra 700 or 800 bucks than if they had given me a clean set of books, plus all the extra time spent on their end researching the issues.
My CPA will ask me to post certain transactions in certain accounts. No big deal. I just write myself a little memo to remember for the next time and then after that it’ll come up automatically.
For some things, they added in an automatic (usually monthly) journal entry. You could, for example, let them post life/auto/health insurance all to one account so they don’t have to think about it, but have an automatic journal entry every month that moves it to the correct accounts with a memo. Next year everything should be all set. The only thing you might have to adjust for is changes in the amount billed over the course of the year, but it’ll probably be easier to sort out than if you had nothing at all to go on.
One more thing I do is try to send my books with the last invoice/bill/statement for each major thing. That is, I’ll send the December and/or January statement from any bank accounts, credit card accounts, notes/loans etc. I reconcile these things every single month, but it’s clear my CPA likes to double check that as of last day of the year everything matches up. Besides, for every extra thing she can verify with her own eyes, it’s that much less liability I have in the case of a mistake.
If I have to go over her head to the partner to ask why something was screwed up, I like to be able to day “There’s no reason why that should be wrong, she had the final statement” as opposed to “Um, well, she shouldn’t have guessed” or “I guess I must have emailed her the wrong number, how do we go about fixing it?”
Yes we have a number of clients who we regularly do maintenance on their bookeeping or tell them to check monthly or quarterly that items are posted correctly. We usually do not like to setup regular recurring journal entries for our messy clients because it usually confuses things at year end. These clients have owners that sometimes pay expenses out of the company books, sometime out of their personal accounts, so putting in recurring entries does not really work in those situations.
That is also fun, having to go thru their personal checking trying to identify payments made for the company, because they don’t bother making an entry on the company’s books at the time, so it all has to be done at year end. So let me analyze these Wal-Mart receipts to pick out supplies bought for the company among all the groceries and other crap bought for personal use… I just love spending time on that :rolleyes: