"I Can't Afford a Bookkeeper" Cost Them $45,000

"I can't afford a bookkeeper." Penny and Jonathan hear it constantly, so today they answer it with receipts instead of opinions. It starts with a client who was running Profit First correctly and then had a tax preparer count every transfer between accounts as income: roughly $90,000 of revenue reported as $280,000. On a conservative estimate, that is about $45,000 overpaid to the IRS, which raises the obvious question of whether you could have hired someone good for $45,000. From there it is one real story after another. $75,000 of overstated income found in the first thirty days. An $11,000 customer check sitting uncashed in a filing cabinet at a construction company. A $1,500 cleanup that turned up $60,000 of income that was never real. And a $600,000 startup loan a previous bookkeeper never recorded, which cost that owner a year of bonus depreciation. Penny also names the red flag most owners never think to check, and explains why so many of us will do our own books but would never dream of doing our own taxes. Then they close out with a new segment, Business Expense or Personal Expense, which is exactly as fun as it sounds. Not tax advice, and they say so on air.Book a Free Call with PennyConnect with us:FacebookInstagramLinkedIn1610 Financial SolutionsTakeaways:"I can't afford it" is usually the more expensive answer. In every story here, the cost of bad books was larger than the cost of good ones, and in the first case it was larger by about thirty times.Profit First works, but only if the transfers get booked as transfers. Money moving between your own accounts is not income, and both software and tax preparers get this wrong constantly.Reconciled does not mean correct. One set of books reconciled perfectly, to a book balance rather than a statement balance, while missing a $600,000 loan entirely.If your CPA or EA only asks you for a P&L and has no access to your books, treat that as a red flag. Somebody other than you needs to be looking at those numbers before they turn into a tax bill.The reason owners do their own books but not their own taxes is marketing, not difficulty. Accounting software spends heavily telling owners they can handle it themselves. No one runs that campaign for tax returns.This show is for general information and encouragement. It is not tax, financial or legal advice. Please consult a professional about your particular situation before you make any decisions.