Is My Expectation Too High as a CPA Collaborating with a Bookkeeper?
I’m reaching out to gather some perspectives because I’m honestly unsure if my expectations are set too high. As a CPA focusing on tax practice, I often collaborate with bookkeepers on common clients, and usually things run smoothly. However, there is one particular bookkeeper who seems overwhelmed, and I’m questioning if my expectations are unreasonable.
Here’s what I’ve observed:
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Improper Account Reconciliation: Despite claims that accounts are reconciled, the balance in QuickBooks does not match the bank statements.
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Accounts Payable Discrepancy: The A/P account shows a debit balance, which seems incorrect.
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Stagnant ‘Payments to Deposit’ Account: This account hasn’t been updated and keeps increasing in balance.
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Unpaid Sales Tax Liability: The sales tax liability continues to grow with no payments ever recorded against it.
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Credit Card Inconsistencies: There are debit balances appearing on credit card accounts.
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Aged Negative Accounts Receivable: There are several negative accounts in Accounts Receivable that exceed 90 days past due.
These are just a few examples, but they highlight my main concerns. I have approached her about these issues, but it’s clear she seems unsure about how to rectify them. To me, these are straightforward Accounting tasks, involving basic debits and credits and proper account reconciliation.
Other bookkeepers I work with don’t encounter these problems, leaving me to wonder if they are exceptionally skilled or if this particular situation is unusual.
So, am I being unrealistic in my expectations, or is this bookkeeper indeed struggling beyond their capacity?
One response
It sounds like you’re facing some significant challenges with this particular bookkeeper, and from your description, it seems you’re not expecting too much from them. Bookkeeping, while more straightforward than higher-level Accounting, still requires a strong understanding of the basics, including proper reconciliations and account management. Let’s break down the issues you’ve mentioned:
Accounts not properly reconciled: Reconciliation is a fundamental Bookkeeping task. It ensures that the records (balances) correspond with the actual bank account activity. If the balance in QuickBooks (QB) does not match the bank statement, it indicates a lapse in basic Bookkeeping that needs to be addressed promptly. This is a critical part of maintaining accurate financial records.
A/P (Accounts Payable) has a debit balance: Accounts Payable should ordinarily have a credit balance, indicating the amount owed to vendors. A debit balance may suggest an error in recording payments or possibly unapplied vendor credits. This mistake could mislead financial decision-making.
“Payments to Deposit” account is not updated: This account is supposed to transiently hold funds received until they are deposited into the bank. An escalating balance suggests that deposits are not being made or recorded correctly, which can cause significant cash flow misunderstandings.
Unpaid Sales Tax Liability: Sales tax liabilities should be cleared regularly. A growing liability indicates either non-payment or non-recording of payments, which can lead to legal and financial penalties for the client.
Credit cards with debit balances: Typically, credit card accounts should have credit balances, reflecting amounts owed. A debit balance might mean overpayments or incorrect recording, such as misclassifying personal expenses, which needs clarification.
Negative Accounts Receivable over 90 days: Negative balances in Accounts Receivable could indicate over-payments or recording issues such as improper invoice application. Old negative balances may also imply a risk of bad debts not being managed appropriately.
Concluding Thoughts
Based on the issues you’re facing, it seems reasonable to conclude that this bookkeeper might be struggling with foundational principles rather than advanced concepts. Correctly managing debits and credits, as well as reconciling accounts, are essential skills for any competent bookkeeper. Given that you don’t see these issues with other bookkeepers, it’s less likely that your standards are too high and more likely that this particular bookkeeper may need further training or support.
Next Steps