Is that really a good idea? I apologize now to those that I’m probably going to irritate with this message but it needs to be said. Doesn’t she have enough to do? When we ask a start up, micro/small business owner, or solo-prenuer who does the bookkeeping, there are three answers commonly given. 1. I do it myself. 2. My wife does it. 3. I have a CPA. Sometimes they have a bookkeeper already and that opens up a whole new line of questions. Are you receiving your monthly financials regularly? Are you reviewing them with the bookkeeper? Are your receivables all current? How about the payables? Yes? Great! No? Call me. Today I’d like to focus on #2, “My wife does that.” This response is often accompanied with a roll of the eyes and wave of the hand, like no worries, it’s all taken care of. If that is the case, that’s wonderful. But, 80% of the time, it’s not exactly true. When you start a business, funds and time are tight so the easiest person to ask for help is the significant other. Maybe it’s the wife. Maybe it’s another family member such as a daughter, son, sister, brother, or sister in law. Someone that is willing to help for free because they love you. When that person is a bookkeeper, accountant, or CPA by profession, it’s awesome. It can be a wonderful idea – in the beginning; but even these systems breakdown after a bit. Here’s an example that we’ve seen many times. The wife (or other loved one) volunteers and does the bookkeeping for the business “when they have time”. After work, when the kids are at school or napping, on weekends, etc. At first it goes pretty well but then the bookkeeping duties get pushed further and further away as other things take priority.
- The invoices aren’t going out as quickly as they should.
- The reconciliations aren’t happening monthly.
- The financials are not being reviewed to see if the business is actually growing or not.
No one notices it’s happening until something bad happens. The business suffers, the customers suffer, and the relationship is stressed. To put it mildly. Here’s the second scenario. What if the wife (or loved one) doesn’t have a clue how to help you with the bookkeeping? They run out and buy QuickBooks or sign up for QuickBooks Online and away they go. “We’ll figure it”. A person that is going to “figure it out” is in charge of one of the most important parts of your business. These are the books we see a few years down the road that are a real mess. The invoices some how get done so that money can be collected because that’s the important part. It’s going to cost thousands of dollars to correct the QuickBooks and take a lot of time. When do they call the accounting firm to help? Right at tax time.
- The chart of accounts is not correct so the financials are a mess, the numbers are all off.
- The customer payments aren’t applied correctly so no one knows exactly who owes what.
- The accounts payable or bills aren’t tracked in the system correctly so the expenses are wrong.
- Same as above – No one notices it’s happening until something really bad happens. The business suffers, the customers suffer, and the relationship is stressed to put it mindly.
The days end in arguing about the business and the family life suffers. We’ve seen the “D” word happen just because of it. The good news is some of it can be avoided with just little help. Someone to be in the middle that is not related. It won’t solve all the uncomfortable business discussions with the wife but it can sure help. If you’d like to know more about the common errors that are made when the QuickBooks is done at home you can download the free e-book here. If the wife is doing the bookkeeping ask her how she’s doing? Does she need some help? Happy wife. Happy life. Check out the Flight Club for just that.