Are My Expectations as a CPA Too High for a Bookkeeper?
As a Certified Public Accountant (CPA), I often collaborate with bookkeepers for our shared clients to ensure the smooth management of financial records. Generally, these partnerships run smoothly, but there are instances where things don’t seem to line up. Recently, I’ve encountered such a case and would love to hear your thoughts: Am I being unrealistic in my expectations, or is this bookkeeper truly struggling?
Here’s what I’m experiencing with one particular bookkeeper:
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Unreconciled Accounts: Despite the claims of completed reconciliations, there’s a mismatch between QuickBooks balances and actual bank statements.
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Debit Imbalance in Accounts Payable: Normally, this account should have a credit balance, but that’s not the case here.
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Dormant “Payments to Deposit” Account: This account hasn’t been updated and continues to accumulate, with no clear resolution in sight.
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Unaddressed Sales Tax Liabilities: There’s a growing sales tax liability that shows no signs of any payments being made.
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Credit Card Anomalies: Instead of a credit balance, the credit card accounts are reflecting debits.
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Aging Negative Accounts Receivable: Alarmingly, negative balances over 90 days old are clogging the Accounts Receivable.
These are just a few examples, but they illustrate a concerning pattern. Despite addressing these issues with the bookkeeper, it seems they’re unsure how to rectify them. To me, these seem like straightforward tasks involving basic Accounting principles like debits, credits, and reconciliation.
Compared to the other bookkeepers I’ve worked with who don’t face such difficulties, I’m uncertain. Is this an isolated case of a bookkeeper in over their head, or am I just fortunate to typically work with exceptional professionals?
Your insights would be greatly appreciated. Do these issues suggest that my standards are too high, or are they indicative of a more significant problem?
One response
It sounds like you’re encountering some significant issues with this particular bookkeeper that are indeed concerning. While it’s important to maintain realistic expectations based on the role of a bookkeeper, the issues you’ve listed do fall under basic Bookkeeping responsibilities, and it’s not unreasonable to expect these to be managed properly.
Here’s a breakdown of what you’re experiencing and why it’s problematic:
Accounts Not Properly Reconciled: At a minimum, a bookkeeper should be able to ensure that the general ledger aligns with bank statements. Reconciliation is fundamental for verifying the accuracy of financial records and ensuring all transactions are captured. Mismatches typically point to errors that need immediate attention.
A/P Has Debit Balance: Accounts Payable should naturally have a credit balance, as it reflects money owed by the business. A debit balance could indicate overpayments, incorrect entries, or other posting errors that need to be resolved.
Unupdated “Payments to Deposit” Account: This suggests cash receipts are not being properly recorded or deposited, which can skew your cash flow understanding and reporting accuracy. It should be regularly reconciled to reflect actual deposits.
Unpaid Sales Tax Liabilities: This is particularly concerning because failure to remit sales tax can lead to compliance issues and penalties. The bookkeeper should track, report, and remit these liabilities accurately and on time.
Credit Card Debit Balances: Normally, credit card accounts should have a credit balance, reflecting owed payments. A debit balance may indicate payments made in excess or incorrect entries, both of which require correction.
Negative Accounts Receivable Older Than 90 Days: This suggests possible issues with overpayments, returned items not processed correctly, or misallocated payments. It not only affects cash flow but also customer relationships.
Given these issues, it seems this bookkeeper might indeed be overwhelmed or lacking the necessary skills for the position. It’s not overly demanding to expect accurate handling of these tasks from a professional bookkeeper. Bookkeepers should have a clear understanding of debits, credits, and basic financial statements, along with the ability to reconcile accounts and handle entries correctly.
Here’s some practical advice moving forward:
Communication and Training: Perhaps start by asking the bookkeeper if they are comfortable with their current workload or if they require further training. An honest conversation might reveal underlying issues or misunderstandings.
Set Clear Expectations: Clearly outline what you expect in terms of reports and accuracy. Setting