Two Bookkeeping Mistakes That Cost More Than You Think

When your bookkeeper says, “Call me before you make big changes,” this is why.

Two unexpected summer projects pushed Our Favorite Bookkeeping Mensch, Paul Rosenblum, to the edge of his patience gene—one with endless QuickBooks disconnects and surprise Amex accounts, the other a full switch to Square with quirky deposits and a surprise loan.

Listen in to learn how last-minute banking and bookkeeping changes can spiral into time-consuming, expensive messes—and how to avoid costly manual work and delays through better planning and access sharing. These simple communication habits will keep your books (and your bookkeeper) in great shape.

Transcript

Episode 64

It’s still summer, so today I’ll continue talking about summer projects, but these two were kind of unplanned. The other projects are coming along -- some are already all caught up and done, others I can see the light at the end of the tunnel, and some, I am just starting now. Remember, summer officially ends on September 20th.  So, there’s still time. I’m not going to finish every project, but some will be completely done, and some I will be close to finishing by the beginning of Autumn.   I’m Paul Rosenblum. 

The first summer project for today that I want to talk about is a client who in 2024 had a partnership which wasn’t working out well at all (Episode 44 – Balancing Business Divorces). After fighting for a year, and going to litigation, as of 12/31/2024, the partnership was defunct, and the company became a single member LLC.  I finished their books at the very beginning of 2025 since I knew there was going to be an ownership change, but I remember going into the books in August of 2024 and finding all the bank accounts lost connection to QuickBooks.  I called and told the now ex-partner this, and that I needed it connected again, which only he can do with his ID and password. With lots of prodding from me, he finally did it at the end of December so that I could finish the bookkeeping for 2024.

  At that time, unfortunately, the download only went back 60 days, so I had a lot of manual data entry to do, with very little time to do it. But of course, it got done.  As I mentioned, in January of 2025, the owner’s situation changed.  Since they never looked at their own books, I let it go for a while, thinking that I can pick up on it at the beginning of April and get them caught up. I went into the books in April and found that the bank accounts got disconnected again.  I tried to fix it by using my ID and password, but that didn’t work because I needed a code that needed to be texted to the owner.  I called the new owner and explained that the only phone numbers showing up to text a code to are the bookkeeper from 3 years ago, the ex-partner, and an ex-investor (for some reason).  We needed that changed. May came and went.  June came and went. Early in July, I emailed the owner and told him that I still can’t do his bookkeeping and it’s halfway through the year.  He sent email to his bank.  His bank, of course, said that it was a QuickBooks problem and QuickBooks said it was a bank problem.  (Soooo predictable) (((((Nooooo!))))) 

I won’t bore you with the details of emails, phone calls, and back and forth, but by July 30th, it was finally fixed. Kind of.  The download started on April 18th, 2025, so that the first 3 ½ months of the year, had to be manually input into QuickBooks online. Even the bank, which does offer CSV file downloads, only went back 60 days. One can input manually in QuickBooks online, but it’s not designed for that.  But I had no choice.  I did it anyway. I spent almost two days on a checking account for 7 months’ worth of data and a savings account. I sent the questions to the owner, he answered me, and I reclassified. I thought that I was done. (((Nooooo!!!!))))) 

 I don’t think so.  I saw several payments to American Express from his checking account.  I was hoping that this was a personal Amex card used for personal expenses but paid for out of the company.  That would make things easier since the payments would be booked into an Equity ‘Draw’ account.  I wrote to the owner. Not only were the purchases for business, but it also wasn’t one card, it was two.  Yes, 2 different American Express cards. And I wasn’t told about this in Jan of 2025?  As I mentioned in the episode referenced here, communication. 

Communication with your bookkeeper is where it all starts. If I wasn’t paying attention, I would have just left the Amex payments either in an owner’s Draw or a ’purchase expense’  (or cost of goods) account and be done with it. Even the accountant might not have caught it.  But if you have been listening to this podcast for a while, you know that I just can’t do that. So, I asked the owner about that.  He sent me back 7 months of transaction lists from both Amex cards that he downloaded from the American Express website. He KNOWS that I work with statements.  Statements need to be reconciled to make sure there are no mistakes made. So, I emailed him back telling him that I need access to both cards, so that I can download and print all the statements that I need without bothering him.

 He gave me access to one Amex account, but I’m waiting to hear back about the other one. (And people wonder why I don’t have patience for so many other things in life outside of the office).  I use all my ‘patient genes during my office time. Someone should invent specific ‘therapy for bookkeepers”.  It’s a million-dollar idea.  A specific therapy for bookkeepers that’s focused on dealing with people in the 21st century who run companies and somehow get the books together without a lot of help from the company owner.  Maybe my next career is an MSW -- I can probably build a practice pretty quickly.  But I digress, as usual. This unexpected project will be done very soon after I get access to all the Amex accounts that I need. 

The second unexpected project that I want to talk about is a small company that I have been doing the bookkeeping since 2016. The owner had a checking and a savings account at a national bank. They started using QuickBooks desktop, then went to QuickBooks Online, then for a very short time, went back to desktop, and then went back to QuickBooks Online.  Last March in the middle of tax season, the company owner called me and told me that they closed the two bank accounts and moved everything over to Square.  Yes, Square now has checking and savings accounts (virtual banks, of course). The VENMO business credit card was included in that mass closing of accounts episode. The owner was sharing a credit card account with a family member, and now, all she was doing was making payments, using the card for maybe 6 purchases for the entire year.  I explained that I still needed statements so the bookkeeping could be done. I told them since it was during tax season, that I’d deal with all of this in the summer.

 I asked them to set up the Square bank accounts so they can be downloaded into QuickBooks so when I’m ready, everything will be set up.  I had a 2+ hour phone with the owner at the end of July.  She couldn’t figure out how to directly connect the accounts to QuickBooks to download.  Square accounts aren’t compatible with direct connect to QuickBooks.  So, a CSV file can be downloaded and manually uploaded to the bank transactions screen in QuickBooks Online. 

We found where to download the CSV file.  We started with the savings account, since there were less transactions for the year.  I downloaded the entire year of 2024  and uploaded the CSV file to QuickBooks online. To my surprise, it worked! Next, we went to the Square checking account.  I did the same procedure, and all of the transactions came in as 12/31/1969!  I tried 4 more times. The same thing happened.   I deleted the account in QuickBooks and tried again.  3 times later, it finally worked.  

Just when I thought that I was ready to start doing bookkeeping, the owner explained that they had set it up so that 90% of each sale was deposited into the Square Checking account and 10% was deposited into the Square Savings account. And that’s exactly the way it worked. One sales revenue automatically went into two different bank accounts. And I thought the conversation was over!  (((Noooo!!!!)))) 

I was then told that there was an American Express card through Square and that they are not using the shared family card any longer as of 2025, except for making payments.  We looked for a CSV file to download for the Amex from Square. We eventually found that.      All for a small company making a very small profit every year.  This has more moving parts than most of my other companies that I do bookkeeping for. 

 There is also a Square Merchant loan that has to be entered into the system as well, since there is interest involved and a monthly entry that needs to be made affecting sales and the merchant loan as well so that everything is accurate. Patience, Paul, Patience. I really need to learn to drink wine. Every night. Maybe every day. Maybe I’ll start smoking too. Cannibis. That’s a new one. Maybe I’ll try the gummies. That’s my fantasy, but I know it won’t happen.  I don’t even like taking aspirin or any other pain killers unless I absolutely have to. So, no --  just have to keep my patience gene filled as much as possible.  

I have told you about this because bookkeepers can relate, and business owners now can understand that the decisions that you make without consulting your bookkeeper beforehand can make things much harder than they need to be, and if they are much harder than they need to be, it costs the business more money for bookkeeping.  Relationships.  Relationships. Relationships.  Have a good relationship with your bookkeeper and your tax preparer. Call us with questions. We don’t mind, except possibly during tax season, but don’t let that stop you!  😊   

I’m Paul Rosenblum