From: Tennessee
Dear Tax Mama,
First off, I love to read your informative column, mostly for the advice
for people in financial difficulties, as I am often asked the same kind of
questions, and I just successfully advised an employee to *ask* the IRS how
a levy came about, and sure enough, it was an error. The levy is lifted! It
just seemed like what you would say.
My question is totally different. I work for a small business owner when
she has overflow work. She has had the same accounting firm for four years,
and three different accountants. She always fusses that they are months behind
on her books and she never knows if she's about to bounce a check. So, I've
shown her how to operate her accounting program, posted her checks, straightened
out her account numbers, etc. She now has some peace of mind, and has decided
to make me her in-house bookkeeper Great!
So the question is, when does she give them notice? We are wavering between
a month and whenever they get the books up to date.
And the second question is, why do accounting firms run two and three quarters
behind?
Jamie
Hi Jamie,
Frankly, if you're ready to take over - and the accounting firm is behind
- I'd give them a month notice - telling them they've already been paid in
advance for work they haven't yet completed. So, please apply the last payment
towards the work yet to be done.
And Jamie, if it were me, I would start doing the work immediately. There's
no reason to wait until the accounting firm catches up. Why should your client
have to wait, when you can bring them up to date immediately.
Even if your client has to pay them for an extra month, it's probably still
cheaper than to keep the firm. Right now, they're not getting useful information
- or timely information. With you there, doing it in-house, they'll know where
they stand right away. AND you'll be there to help guide them into more sensible
or profitable paths. In fact, once you start looking at their books, you'll
probably see other ways they can cut costs or increase their profits.
And why does it take so long?
Well, essentially, two reasons.
- All work has to be reviewed by at least one, sometimes two people,
depending on the size of the company.
- They don't just do routine, monthly clients. They do other things requiring
immediate deadlines that interfere with their regular, monthly bookkeeping.
- Poor time management - and poor management, in general.
Oh, that was three reasons.
As to my practice, and why am I behind?
Because it's time for me to move past a tax practice to the writing and other
things that I have put off doing for the last 25 years.
I've been telling my clients for four years that it's time for them to see
other tax professionals (to whom I have referred them) and they just keep coming
back AND sending their friends.
I suppose that's a good thing.
After all, they're all folks I rather love.
But it is time to move on. And we will soon be contacting most of our clients
to help them make other arrangements. Frankly, I think they can get better
service and attention from someone who's dedicated to a full-time tax practice.
As for you - you're being a big help. So, yes, it's time for your boss to
have in-house help.
Have fun!
Best wishes,
Eva Rosenberg, MBA, EA
