Should You Be Talking to Your Bookkeeper More?

How about a candid and lighthearted vent about the hidden frustration bookkeepers face when small business owners don’t communicate or engage with their bookkeeping, financial reports, and business finances? It’s time for our favorite Bookkeeping Mensch, Paul Rosenblum, to share real situations, from miscategorized transactions to years of ignored reports, to show how poor communication leads to errors, delays, and disconnect between bookkeepers, accountants, and clients. He hopes that for you this can be a humorous reminder to stay involved, ask questions, and treat bookkeeping as an ongoing partnership that helps you make better financial decisions.

Transcript

Season 8 Episode 2

As I write this episode, the March 15th deadline just passed, (and I’m not in a rubber room just yet) and now I have to just get through the April 15th deadline before I get back to totally regular life (although this year, the stress level has been way down compared to other years, except for two incidents pretty recently). 

I was going to talk about something else in this episode today, but it can wait. However, since the last two episodes have been about regulation in the industry, I have a few other ideas to ponder. Realistic, maybe not, but let’s talk about it anyway.  I’m Paul Rosenblum.

Let me first say that this is a somewhat pointless episode. But take a few minutes out of your day and listen to it anyway. Maybe it’ll make you smile.   We have talked about regulations for tax preparers and bookkeepers. What we haven’t spoken about is ‘Regulation for Business Owners’.  Not business regulations.  There are plenty of those.  I’m talking about the responsibilities of business owners (and I’m talking mostly about small business owners), and what their responsibilities are outside of filing taxes and not committing fraud and not bouncing checks, especially payroll checks, payroll taxes and other things.  What I’m talking about is creating rules about how much a small business owner has to talk to their bookkeeper and accountant.  Some accountants have no relationship with their clients, except during tax season, others have monthly or quarterly 'check-ins’ with their clients year ‘round. What I am talking about is the fact that I have several clients who never ask to see their books. I send reports when I finish each month, but I get no email or phone calls from clients wanting to discuss things or if they have any questions about the reports (P&L and Balance Sheet) that I have sent. Really?  How can that be?  Are they determining the profit of the business by looking at their bank account at the end of the month and if it went up, they made a profit and if not, they were not? 

What does that say about the client?  I look at that as disrespect to the bookkeeper. I work hard, and as I said in many episodes, I expect to work with the client to put books together that will be helpful to them to make better business decisions and to be able to submit to the tax preparer for tax purposes.  How can a client run a business without looking at the books and having regular conversations with their bookkeeper?   

Maybe regulations for the business owners’ are in order. Maybe the standard should be that every business owner has one (at least) 15-minute call monthly with their bookkeeper, so they know what is happening financially with the business?  No --  it’ll never happen and it’s also unenforceable. 

I had one situation recently that a government refund check was deposited into the bank. This particular bank does not show graphics of most of the incoming checks that client’s deposit into their business bank accounts. So, I didn’t know what it was. I made the mistake of entering it as revenue because of a QBO rule that was set up automatically.

 When the tax preparer was going through the books, he emails me and ‘yells’ at me (in capital letters) for entering that in the wrong category. (He’s very high strung and draws conclusions quickly based on very little information).  The client knew that it wasn’t revenue since it was a paper IRS check, the tax preparer knew that it wasn’t revenue--- (even to the amount of the payment and the interest) -- why didn’t I know?  Why did nobody tell me? “I don’t get no respect. No  respect at all”, My Rodney Dangerfield impression.

Regulation #1: Having required conversations between the client and the bookkeeper and the bookkeeper and the tax preparer when needed.  In my signature of my email, one of the things I say with graphics is “I’m a bookkeeper, not a magician!”. I can’t read minds—and this is why their has to be communication with the ‘team’ that I’ve been talking about for ages on this podcast.  The problem?  Enforcement. As we say in NYC, --- Fuhgeddaboudit. It can’t be enforced. But it can still be a dream. My own dream. But I’m sharing that dream with all of you.   

Some tax preparers are like Sunday drivers. They come out of hiding only from the middle of Jan through April and then they disappear again for the rest of the year.  We shouldn’t need regulations, but human beings aren’t perfect. Sometimes we all have to be pushed to do the right thing. 

I have clients who I send questions to when I finish each month and aside from 2 or 3 clients who answer within an hour or two, most take a week to come back with answers for 3 or 4 questions that I have. That slows down the entire process of finishing that month of their books. But they don’t care since they don’t ever ask to look at or discuss their books.

  It’s a strange situation -- I get paid by the client, but in reality, I am putting together books for the tax preparer.  I’m the rope in the tug of war, and I don’t like it.  The problem is this.  Again, how to enforce the rules or regulations that would be set up for clients.  I don’t think we can. So, maybe this episode is null and void?  However, It’s my podcast, my dream and my rules! So I will continue!   

No – I am just venting at all of you. (and clients, of course).  I was just working with an accountant the other day, and he wanted a couple of things changed in the books.  He was very nice about it, and he’s truly a pleasure to work with.  But others are emotional, angry, overworked, and generally not professional toward people who they have to work with (clients and bookkeepers). How do you regulate that?  I guess we can’t.  Dream on. (Remember Steven Tyler and Aerosmith? 

And the last impossible regulation/rule in a perfect world would be this:  

If you are a bookkeeper or a tax preparer, no federal or state taxes would be owed We wouldn’t have a shortage of bookkeepers or tax preparers if that happened!  I know, impossible and will never happen, but I’ll channel Steven Tyler and have a dream on.

So, this is an episode on regulation ideas that actually will never be regulations because they are unenforceable. However, business owners (yes, I’m talking to YOU)—it would be nice if you communicated with your bookkeeper with respect because we are working hard for you and care about your books and we want you to make good business decisions by understanding your books (and if you think your bookkeeper isn’t working hard for you, then it’s time to change bookkeepers). 

Maybe some of the problem is not having regulations on bookkeeping as I’ve talked about in the last 2 episodes. The client just wants to find the lowest priced bookkeeper and doesn’t expect anything more than putting together a set of books that can be filed in a tax return. Even if it’s not 100% correct.  If they get audited later, they will blame the bookkeeper, fire them, and possibly do the same to the tax preparer, or even have the audacity to request a large discount on a future tax return. 

I have always dealt with smaller businesses. A Business that I can call the owner directly and have that relationship whenever possible.  And that has worked for many years, mostly.  But there really has been a shift since March of 2020.  Clients want cheap bookkeeping, even if it means hiring someone outside the United States who might know accounting in general, but not necessarily American accounting and what the IRS is looking for. 

When clients want something, they want it ASAP, but when I want something, it can take 2 weeks to get back. Clients call, text, email, and if I still had a beeper, they would use that too. But when I call, rarely do they pick up the phone. As I have said in some prior episodes, I am usually ok with the fact that bookkeepers are mostly unwanted by the client, but necessary to the client. Us bookkeepers have to be type A strong personalities because of how clients treat us. 

I’ve had a client for 12 years.  He shows a large profit most years, but has little money in the bank, owes credit card bills, got behind in office rent, and behind in paying individuals who he owes money to. Only payroll seems to be paid every time it’s due. It got worse and worse as the years progressed.  We had short conversations on the phone about it, and he never did anything about it. 

Finally, I went through the balance sheet and the P&L for 2025. I did a deep dive. I marked up both reports and emailed him. No response. Finally, just a few days ago, we had a long phone call going through everything. It was obvious to me that he had not gone over the books in years.  I also noticed that the ‘draw’ that he was taking out of his single member LLC was more than what his profit was for the year.  Together with what bills were owed and not having enough money coming in to pay them, I was wondering how he was going to stay in business. I still don’t have that answer. In this case, his personal lifestyle is more important to him than the health of his business. I think I opened his eyes a little bit with the first serious meeting in 12 years of putting together his books. I’m sure nothing will change, but at least I got my two cents in (get it)?  

Remember Tom Hanks and his friend ‘Wilson’ in the movie “Castaway”?   Sometimes I think us bookkeepers are on our own island, and every now and then, a cruise ship passes and waves at us and then goes on their way.  The only difference is that I’m not sleeping in a hut and looking for food – I have a grocery store 3 blocks away that is open 24/7. Sometimes I want to find that island and live there for a month or two, all by myself.  No internet, no tv, only clean air, lots of food, and otherwise silence.  

But, back to reality though --- it’s still tax season.  I’ll be concentrating on the sole props, single member LLC’s and last-minute things that will come in. And angry tax preparers, angry clients, online accounting software that is slow because the servers are overloaded.  Deep breaths. I picked this career, and it’s 1000 times better for me to do this than to work for someone else.  So, I take this whole episode back --- it’s not THAT BAD. I do realize how lucky I am. But tomorrow will be another day.  Like my blood sugar, my mood, frustrations and feelings about being a bookkeeper for 30 years go up and down depending on which set of books I’m working on at the time.  

The good news is that warm weather is coming!  Which means that tax season will be over soon!  Be in your Air pods soon.  I’m Paul Rosenblum