Uncover your clients’ bookkeeping roadblocks to help them stay on track and avoid scrambling at tax time.
Bookkeeping is so important for businesses, yet many business owners simply… don’t do it. Or if they do, they put it off until tax season and give it minimal attention throughout the rest of the year.
This makes your life a lot harder as an accounting professional. But there is hope—even for the most numbers-averse clients.
Rather than worrying about how to fix bad bookkeeping, help your clients keep accurate records to stay on track all year long.
The following are some of the most common reasons clients avoid their bookkeeping. Plus, some solutions you can put into practice today, from FreshBooks Accounting Partners.
- 1. They Don’t Know Where to Start
- 2. They Don’t Know What They Should Keep Track Of
- 3. They’re Afraid to Make Bookkeeping Mistakes
- 4. They Don’t Have Time to Do Their Bookkeeping
- 5. They Don’t Know How to Use Bookkeeping Software
- 6. They Aren’t Sure How to Use the Financial Information
- 7. They Don’t Want to Face the Reality of How Their Business Is Doing Financially
- When It Comes to Keeping Your Clients on Track…
1. They Don’t Know Where to Start
A major bookkeeping hurdle for a lot of small business owners is simply not knowing how to get started. There’s so much to consider that it can be a daunting task, especially for people who don’t have a lot of experience with business bookkeeping.
But, as Kellie Parks, CPB shares with her clients, “it’s easier to stay caught up than get caught up!”
You can help your clients start off on the right foot by providing them with a bookkeeping guide to follow. Highlight the essentials for them, like how to set up their bookkeeping system, what records they need to keep, and how to reconcile their accounts.
If you’re working on building your advisory services, you might also offer to do a training session on bookkeeping basics for their company. Once clients see how easy it is, they’ll be more likely to keep up with it throughout the year.
2. They Don’t Know What They Should Keep Track Of
Many business owners are experts in their industry, but don’t consider themselves to be “numbers people.” But if your clients don’t fully understand all the necessary documentation—or the level of detail needed—it can cause a headache for you as an accountant or bookkeeper.
Get proactive with numbers-averse clients by giving them a list of financial statements to track. Work together to help them understand the key financial records they’ll need to keep tabs on, like inventory, revenue, large equipment purchases that may need to be depreciated, and receipts for monthly business expenses.
Start from the basics, like how to submit receipts with expense reports and provide precise details to ensure each expense is coded correctly in the general ledger. Think of it as giving clients the tools they need to help them stay on budget and make more informed financial decisions.
From there, you can build up to more complicated bookkeeping tasks, like recording depreciation, allocating expenses, and amortizing prepaid costs.
3. They’re Afraid to Make Bookkeeping Mistakes
Whether they’re worried about incorrect data entry or just don’t have a grasp on record-keeping yet, your business owner clients might be putting off their bookkeeping responsibilities to avoid making mistakes.
Along with coaching your clients, you can also offer to review their financial reports to catch any bookkeeping errors they might have made.
Remind them of the standard operating procedures (SOPs) and internal controls you have in place. For example, you can likely change their access within their accounting software, or have them assign a dedicated Accountant role, so they cannot delete a journal entry by mistake or delete an account.
Proper controls and checks will help clients feel confident in their abilities, and feel reassured that small errors don’t always cause major problems. It will make them feel safe knowing that mistakes happen, but they can always be fixed.
4. They Don’t Have Time to Do Their Bookkeeping
Many business owners are already stretched thin with running their company, and bookkeeping gets bumped to the bottom of their to-do list.
Nayo Carter-Gray, EA, MBA tells her clients, “As a small business owner you are wearing all the hats, and bookkeeping tends to take a back seat to everything else until tax time rolls around.
But it really should be a priority for you because the data will help you make smart business decisions and be prepared well in advance of tax time.”
A simple solution is to make bookkeeping less time-consuming. Offer to train your clients’ employees on how to do bookkeeping so the client/owner can focus on running their business instead.
Depending on their situation (and yours), you might also suggest they outsource to a bookkeeper.
If they’d like to do their own bookkeeping, you could recommend accounting software that automates expense tracking and other time-consuming tasks.
5. They Don’t Know How to Use Bookkeeping Software
Accounting software can be overwhelming for small businesses that manage their own books and don’t have the resources to work with an accountant full time.
“Typically, small business owners are not familiar with the technology that can help them automate their bookkeeping,” shares Nikole Mackenzie, CPA. “Because it’s so manual and time-intensive, they continue to put it off and then they end up with a big mess to clean up when tax time comes around.”
Work with your clients to help them choose the right accounting software for their business and train them on how to use it.
With the right tools, your clients will feel empowered to manage their own bookkeeping and it’ll free up time in your meetings so they can ask questions about their financial situation that really matter (instead of asking if a receipt is required).
(Hint: Share this Guide to Reimbursable Expenses with your clients.)
6. They Aren’t Sure How to Use the Financial Information
Clients who don’t know how to use financial information might think it’s perfectly fine to put off their bookkeeping until their taxes are due.
From risking late payments, to forgetting to track reimbursable expenses, to mixing up personal expenses with business expenses, the list of potential mistakes could lead to some serious consequences.
Help your clients by showing them how to use the information from their bookkeeping to get an accurate picture of their business’s financial health.
Consider creating reports to show them where their money is, their cash flow, and what areas they need to improve. You can also help them develop budgets to keep up with the financial aspects of their business and get an overall view of their financial situation.
7. They Don’t Want to Face the Reality of How Their Business Is Doing Financially
Surprisingly, your clients could be avoiding their bookkeeping because they’re afraid they’ll uncover some difficult realities about how their business is really doing. It’s particularly common for small business owners who have a lot of personal equity invested in their business.
It might be tough, but it could be time to have a conversation with your client. Without accurate records and updated financial information, you can’t get the full scope of their business’s financial health. As a result, you can’t advise them on how to improve it, either.
Help them get back on track by being a resource for them. Let them know that it’s common to fall behind on bookkeeping and offer to help them get caught up. You can also provide tips on being more proactive with their bookkeeping, so they don’t fall behind again in the future.
Make it easy for clients to provide you with what you need. Create specific due dates and reminders in their calendar. When there are a lot of steps in between, they might put it off.
When It Comes to Keeping Your Clients on Track…
Your clients trust you to help them avoid making common bookkeeping mistakes. Take time to work with them to get an understanding of their business goals, financial hang-ups, and any other concerns so you can assess the best way to help them.
This will give you the insight to help them fix the root of the issue, and build stronger relationships with your clients.
Whether it’s providing educational resources, recommending a bookkeeper to work with, or talking through accounting software options, they’ll appreciate your expertise and advice in helping grow their business.
about the author
Dana Thao is an accountant turned writer. She has a knack for making complex accounting concepts easy to understand. When she’s not writing about accounting, she can be found creative writing, sipping on green tea lattes, and playing video games with her family. You can learn more about her work at danathao.com.