How Are People Not Embarrassed to Send This Out?

The Tale of a Disastrous Bookkeeping Experience

Recently, I found myself with a new client file after their previous bookkeeper fell behind. Not only was the Bookkeeping delayed, but the work was also shockingly subpar.

Deposit Discrepancies: None of the recorded deposit entries matched the actual bank deposits. It would be understandable if there was a consistent oversight, such as failing to account for merchant fees, but even that was erratic.
Misuse of Cash Box GL: The cash box general ledger was used to record tips paid through a debit machine, yet these never made it to the staff. How does that happen?
Undeposited Funds Conundrum: An astounding $40K in undeposited funds accumulated with vague “outstanding at the end of the day” notations in daily entries. These didn’t link to the cash deposits made at the bank. Instead, they were mismatched with tips in the cash box GL. To add to the chaos, when numbers didn’t align, a $3,300 adjustment magically appeared in a suspense account to make up for it.
Missing Merchant Fees: How can you have a merchant processor and neglect to record any associated fees?
The Injustice of Paying for Incompetence: How can anyone charge clients for producing such a disastrous mess?

A Note to Local Bookkeepers

If you’re operating in the Vancouver area and this scenario sounds familiar, it’s time to reflect on your practices. Encourage your clients to seek out a competent bookkeeper if you find yourself falling short. It’s crucial to uphold professional standards.

A Word on Supporting Inexperience

For those advocating the support of inexperienced bookkeepers starting their businesses, here’s a reason for caution. Everyone has to start somewhere, yes, but this mess is a prime example of why starting with a simple file can still lead to significant problems. What was meant to be a straightforward service business became unnecessarily complex due to poor handling.

This experience has reinforced why thorough training and oversight are essential in Bookkeeping. Let’s strive for excellence to avoid repeating these mistakes.

Issues Encountered

Mismatched Deposits:

Problem: None of the recorded deposits match the actual bank deposits.
Potential Causes:
- Incorrect or incomplete data entry.
- Misunderstanding of merchant fees or other deductions.
Solution:
- Implement a reconciliation process: Regularly compare the recorded deposits with bank statements to identify discrepancies early.
- Training: Ensure the bookkeeper understands how fees and deposits should be recorded.

Improper Use of Cash Box GL for Tips:

Problem: Tips paid via debit machine are recorded in a cash box general ledger but not cleared to staff.
Potential Causes:
- Misclassification of transactions.
- Lack of understanding of how to process and allocate tips.
Solution:
- Clear Policy: Establish a clear policy on how and where tips should be recorded and distributed.
- Regular Audits: Conduct regular audits to ensure compliance with the policy.

Undeposited Funds and Random Entries:

Problem: Accumulation of undeposited funds and unclear daily entry lines.
Potential Causes:
- Lack of a systematic process for handling cash and daily deposits.
- Incorrect journal entries.
Solution:
- Streamline Processes: Develop a standardized process for managing daily cash and deposits.
- Review Entries: Regularly review journal entries for accuracy and consistency.

Unrecorded Merchant Fees:

Problem: Merchant fees are not being recorded.
Potential Causes:
- Oversight or misunderstanding of fee recording.
Solution:
- Establish Protocols: Create clear guidelines for recording all merchant fees.
- Software Automation: Use Accounting Software to automate the calculation and recording of fees.

Producing an Inaccurate Financial Report:

Problem: The overall financial records and statements are inaccurate and unreliable.
Potential Causes:
- Incompetence or lack of knowledge by the bookkeeper.
Solution:
- Seek Expertise: Consult

One response

APAdmin

25 February 2025 at 7:20 PM
It’s understandably frustrating to encounter such issues with Bookkeeping, especially when accurate financial records are critical for any business. Below, I’ve broken down the main areas of concern you’ve raised, and provided suggestions for addressing these problems and preventing them in the future:

Issues Encountered
1. Mismatched Deposits:
  - Problem: None of the recorded deposits match the actual bank deposits.
  - Potential Causes:
    
    Incorrect or incomplete data entry.
    
    Misunderstanding of merchant fees or other deductions.
  - Solution:
    
    Implement a reconciliation process: Regularly compare the recorded deposits with bank statements to identify discrepancies early.
    
    Training: Ensure the bookkeeper understands how fees and deposits should be recorded.
2. Improper Use of Cash Box GL for Tips:
  - Problem: Tips paid via debit machine are recorded in a cash box general ledger but not cleared to staff.
  - Potential Causes:
    
    Misclassification of transactions.
    
    Lack of understanding of how to process and allocate tips.
  - Solution:
    
    Clear Policy: Establish a clear policy on how and where tips should be recorded and distributed.
    
    Regular Audits: Conduct regular audits to ensure compliance with the policy.
3. Undeposited Funds and Random Entries:
  - Problem: Accumulation of undeposited funds and unclear daily entry lines.
  - Potential Causes:
    
    Lack of a systematic process for handling cash and daily deposits.
    
    Incorrect journal entries.
  - Solution:
    
    Streamline Processes: Develop a standardized process for managing daily cash and deposits.
    
    Review Entries: Regularly review journal entries for accuracy and consistency.
4. Unrecorded Merchant Fees:
  - Problem: Merchant fees are not being recorded.
  - Potential Causes:
    
    Oversight or misunderstanding of fee recording.
  - Solution:
    
    Establish Protocols: Create clear guidelines for recording all merchant fees.
    
    Software Automation: Use Accounting Software to automate the calculation and recording of fees.
5. Producing an Inaccurate Financial Report:
  - Problem: The overall financial records and statements are inaccurate and unreliable.
  - Potential Causes:
    
    Incompetence or lack of knowledge by the bookkeeper.
  - Solution:
    
    Seek Expertise: Consult
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How the f*ck are people not embarassed to send this out?

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