At this time of year, it’s not just ghouls and zombies that strike terror into the hearts of intelligent adults. It’s business owners who don’t know accounting who become a monster client, and horrify their bookkeepers and CPAs.
To celebrate Halloween I’m going to mix a dozen metaphors, and tell the story of Jason. He’s a Frankenstein-like creature created out of the mistakes I’ve seen my clients make.
Jason’s head isn’t screwed on straight. He just started using QuickBooks right out of the box, without consulting a ProAdvisor. He added all his Products and Service Items to both his Chart of Accounts AND his Items list, creating vast redundancies.
Jason’s left arm has a built-in credit card swiper. He correctly makes a sales receipt for each payment he takes, but doesn’t know they all land in Undeposited Funds for him to combine. Then he sucks in his deposits from the bank feed…and his P&L shows twice as much income as he really made.
Jason can’t shake hands with his vendors because his right arm can’t reach out. He didn’t assign Payees to his transactions. While he properly categorized the expenses, he doesn’t know how much he paid to whom.
Jason constantly barfs up his food. His morning Starbucks and lunch at Subway are in Meals and Entertainment instead of Owner Draw. He justifies this because he wouldn’t need coffee or lunch out if he wasn’t on the job, but he has a stomach whether he’s working or not.
Jason’s legs ooze money. He knows he can make purchases at the end of the year to maximize his tax deductions, but he thinks that’s dependent on his bank balance. So he gets new gold-plated kneecaps, bringing his checking account down to nothing. Unfortunately, he doesn’t realize that although there was some money in the bank, his profit was negligible. He should have given that money to the good doctor Linov Credit (who built him) instead.
After Halloween 2016, Jason should make sure his books are set up correctly. Next year he’ll be able to dress up as a graceful ballerina instead of a monster client.