Signs Your Accountant Is Missing Entries

Signs Your Accountant Is Missing Entries

Running a business means you have to trust someone with your money. You give them all your receipts, bank statements and invoices. They are supposed to make sense of all these numbers. Most of the time this works fine.. Sometimes small mistakes happen. These small mistakes can cause problems when it is time to pay taxes or get a loan.

The problem is that missing entries do not usually tell you that they are missing. Your accountant will not call you. Say "I forgot to write down some expenses." You have to look for the signs that something's wrong. Here are some signs that your accountant might be missing some entries.

Your Bank Balance and Your Books Do Not Match

This is a red flag. You should check your bank account. Compare it to what your bookkeeping software says. If the numbers are close that is okay. Sometimes it takes a days for checks to clear or for deposits to show up.. If the numbers are very different or if they have been getting more and more different over time that is a sign that some transactions are missing.

A good accountant checks the books against the bank statement every month. If you ask your accountant when they last did this and they cannot give you an answer you should be worried.

Expenses Show Up in Some Months. Not in Others

Look at your monthly reports. Rent should show up every month unless you stopped paying rent. Other regular expenses, like software subscriptions and insurance should also show up every month. If you see an expense in January but not in February or March and then it shows up again in April something is wrong.. The expense was not written down or it was written down in the wrong place.

This kind of mistake is easy to miss if you only look at the totals.. If you compare the reports from month to month you will see the problem.

 

Tax Time Brings Unpleasant Surprises

If your accountant has been keeping records you should not be surprised by your tax bill. You should have an idea of what to expect based on the estimates you made during the year. If your tax bill is much higher or lower than you expected that means something is wrong. Maybe some income or expenses were not written down. Maybe some deductible expenses were missed.

A big surprise at tax time is usually a sign that the accountant made some mistakes.

 

Reports Keep Getting Revised

It is okay if an accountant makes a mistake sometimes.. If you keep getting revised reports with different numbers that is a problem. It means the first report was not accurate. It means the accountant did not have all the information when they made the report.

One or two corrections are okay.. If it happens a lot that is a sign that the accountant is not doing a good job.

 

Reconciliations Are In Progress"

Ask your accountant to show you the last bank reconciliation. If they say it is not finished or that they are still working on it from a months ago that is a sign that something is wrong. Reconciliation is the process of checking the books against the bank statement. If this is not being done mistakes can add up.

A good accountant finishes the reconciliation within a weeks of the end of the month. If it takes longer than that there may be errors in the books.

 

 You Find Yourself Doing the Bookkeepers Job

If you find yourself checking every invoice or tracking expenses on your own that is a sign that you do not trust your accountant. You should not have to do the accountants job. If you are doing it it is because you have found mistakes in the past.

 

Vague Answers to Specific Questions

Ask your accountant a question, like "How much did we spend on marketing last quarter?" If they do not give you an answer or if they say they will get back to you that is a sign that something is wrong. It means they do not have the information or that it is not accurate.

 

Old Invoices and Bills Are Sitting

Check your accounts receivable and payable reports. If you see invoices or bills that are still open that is a sign that something is wrong. It means the payment was not recorded or that it was recorded in the place.

This kind of mistake can cause problems. It can make it look like you have money than you really do. It can make it hard to plan for the future.

 

 Payroll Numbers Do Not Line Up

Payroll is important. You have to make sure the numbers are accurate. Compare your payroll reports to your ledger. If the numbers do not match that is a sign that something's wrong.

 You Only Discover Errors During Tax Prep

If you only find mistakes when you are getting ready to do your taxes that is a sign that something's wrong. It means the accountant is not catching the mistakes during the year. It means the mistakes are adding up.

 

Vendor and Client Statements Do Not Match Your Records

Sometimes a vendor or client will send you a statement that does not match your records. This can be embarrassing. It is also a chance to catch mistakes. If this happens a lot it is a sign that something's wrong.

 What To Do If You Notice These Signs

If you see one of these signs it does not mean you have to fire your accountant. It might just mean they are busy or need to communicate. Start by talking to them. Ask to see the reconciliation. Ask how they categorize transactions and how often they review the books.

 

If the answers do not make sense or if the same problems keep happening it might be time to get an accountant. It might be time to get a bookkeeper to clean up the records.

Do not wait until tax time to fix the problem. It is better to catch the mistakes when it is easier to fix them.

 

 The Bottom Line

Your books should tell you the truth about your business. When entries are missing the truth gets distorted.. You can catch these mistakes if you look for the signs. It just takes a minutes to compare your bank balance to your books or to ask some questions. Catching the mistakes early can save you time and money. It can help you make decisions, about your business.