How to tell a client their bookkeeper sucks....

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#1
CPA83  
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As tax professionals, I would like to think we have all been there. Getting ready to prepare a Sched C/1120S/1065/etc, we open up the clients quickbooks (kept by somebody other than ourselves) and find a royal disaster. How do we communicate to the client that their bookkeeper is, well, incompetent?
 

#2
makbo  
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Ugh, that's tough. I guess you have to gently find out why the client employs that bookkeeper, and then indicate how much more the tax prep fee might be due to inadequate bookkeeping records, or alternately, how much worse an audit would be.

I've only run into this once so far, it was a client who was living primarily off of alimony income and trying to run a photography business. Always borderline whether it was a hobby or a business. But I couldn't believe she was spending around $3K a year out of her meager revenues for a "bookkeeper" -- the only entries in QB I could really rely on were for the bookkeeper's own fees. She couldn't even get credit card and check payments assigned to the correct bank accounts, so basic reconciliation was a nightmare.

However, it seemed this bookkeeper also worked with many other people in town, so maybe the client felt that the bookkeeper was also a valuable referral source. After a few years, the client did finally drop the bookkeeper, around the same time I helped her move to QB online which for her business made a lot more sense than QB desktop.

Now, if the client's incompetent bookkeeper is the client, you've got a different problem, or an opportunity. ;)
 

#3
ATSMAN  
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Yes I think we all have seen these disasters. I have one client whose GF is the bookkeeper and she sucked! So finally I told my client what the issues were and also suggested that Intuit offers training and so does other third party vendors and it may benefit his business and also "reduce" tax prep fees if the data is received accurate!

This was incentive enough for my client to spend some money to train her and I am beginning to see some changes and I can speak to her intelligently!

So it may be that the bookkeeper needs training or an attitude adjustment!
Last edited by ATSMAN on 29-May-2018 8:14am, edited 1 time in total.
 

#4
CathysTaxes  
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In my experience, it's the client who is screwing up the books and they complain about the cost to fix them.
Cathy
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#5
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This is so difficult, and different clients take it different ways. I once had a Dr. ask me if he should fire his wife, as she was the one who did payroll and had made a mistake on the tax deposits which cost quite a bit in penalties and interest. He was very serious.

Another client was just the opposite. Books were a mess. Would give me checkstubs without the payee name. Didn't want others in office to know what others made if they accidentally saw checkbook (but I was supposed to prepare payroll tax reports). Advised them to lock up checkbook, as I needed to know what everyone made. Bookkeeper was no relation to client, but client thought they could do no wrong. Actually lost this client, and to this day I think bookkeeper was up to no good!
 

#6
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Whether or not it will be ever be resolved depends on the relationship between the client and bookkeeper. If related, good luck. If they are an employee or independent, you may be able to resolve the problem with effective communication. I encounter it frequently, and always initially address it by outlining the general problems I am finding, and why they are problems. I also make sure the client understands how much the problems will cost them, not only with my fees but other things, such as tax liabilities when the books are wrong.

I've lost some clients because they refused to address incompetent bookkeepers. Others, the clients eventually replaced them. And in other cases, I have basically had to train the bookkeepers in how to do their work, CORRECTLY.
 

#7
ATSMAN  
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I also make sure the client understands how much the problems will cost them, not only with my fees but other things, such as tax liabilities when the books are wrong.


That is the key to get any action by the client to resolve the issue. If you can demonstrate that fixing the books at their end will save an hour or two of tax prep charges, will get their attention.

I had another young lady ask me if I could walk her through on QB so that she does not make the same mistakes again!
 

#8
FLAcct  
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I wish there was an exam a bookkeeper had to take before they could call themselves a bookkeeper. Nowadays most "bookkeepers" are people who enter invoices and accounts payable into QB and write checks out of QB. They don't know the difference between a debit vs. a credit and a balance sheet account vs. an income statement account.

Almost all of the QB files I get from my clients (or online QB) are a mess when I get them. I let them know how much their bookkeeper sucks by separately stating my fee for straightening out their QB. If/when they ask why their fee is so high, I let them know all the work I have to do to get accounts right for the tax return.
 

#9
ATSMAN  
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They don't know the difference between a debit vs. a credit and a balance sheet account vs. an income statement account.


That is because they never learned double entry accounting! Most of these people performed "Clerical" duties before getting the official title of the Bookkeeper from their boss.
 

#10
CathysTaxes  
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ATSMAN wrote:
They don't know the difference between a debit vs. a credit and a balance sheet account vs. an income statement account.


That is because they never learned double entry accounting! Most of these people performed "Clerical" duties before getting the official title of the Bookkeeper from their boss.

That's so they can pay them peanuts. Then when a real bookkeeper shows up, they don't want to pay them.
Cathy
CathysTaxes
 

#11
ATSMAN  
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Or not pay at all if you can get your wife or girlfriend play the role of a bookkeeper. I have to deal with a few of them!
 

#12
CathysTaxes  
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ATSMAN wrote:Or not pay at all if you can get your wife or girlfriend play the role of a bookkeeper. I have to deal with a few of them!

They are the worst!
Cathy
CathysTaxes
 

#13
MWEA  
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My odd dilemma is the bookkeeper is terrible, but also happens to be my best referral source to new business clients!
 

#14
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I've inadvertently gotten two in-house bookkeepers fired. Both times I went out to the client's office and sat with the bookkeeper with the purpose of providing training. At the end of each visit I made a list of the things the in-house bookkeeper needs to fix. When the clients saw the list they were unhappy with the bookkeeper and it led to them getting fired and hiring our firm to do the bookkeeping. Looking back it was an effective way to sell our more capable services but when I was doing it I truly was trying to help.
 

#15
ATSMAN  
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MWEA wrote:My odd dilemma is the bookkeeper is terrible, but also happens to be my best referral source to new business clients!

Well you have to make a choice! Do you want to rock the boat or just live with it?

Looking back it was an effective way to sell our more capable services but when I was doing it I truly was trying to help.


That is a good business strategy!
 

#16
deniz  
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I think bad bookeepers/accountants put their clients at risk, so I have learned to be fairly blunt. Besides, we have a duty to the client, not their bookkeepers.

One client's secretary had $400,000 embezzled from him and the accountant had no clue.
-Another client thought his business was worth $2 mil, but after adjusting for obsolete inventory (which was caught be a valuation person rather the CPA), the value was found to be $300,000. The client now plans to lay off half the workforce.
-A third client had $700,000 in funds squandered and was disgraced by other investors because the client owner was persuaded to hire the President's wife as bookkeeper/accountant.

But, I dont provide bookkeeping services, so there is no conflict of interest.
 

#17
JR1  
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I'm late to this, was away on vaca....but this is an opportunity! I'm surprised that you don't review the QB file regularly. Duh. So just explain that this is too messed up to take at year end, that you must do quarterly review and clean up....which is what I do for most of my QB clients.
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