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How to Avoid Dead Bookkeeper Syndrome

Feb 21st 2018
Owner FitBooks Pro
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Dead Bookkeeper Syndrome is a term I have coined to describe the situation of a company’s bookkeeper suddenly disappearing or dying.

During the December holidays, one of my clients, a husband and wife team who run a local repair shop, went overseas to visit family. While there, the wife had a heart attack and was admitted to the hospital. Long story short, she (thankfully) is not dead, but she is still overseas recovering, and her husband is back home running the shop. 

The problem is, he knows nothing about QuickBooks. As their QB Pro Advisor, I only visited their office quarterly to review the books and close the quarter. I’m not entirely familiar with the daily procedures for their books, but I know more than the husband!

I am now going there twice a week to train their son, who has no accounting or bookkeeping experience, how to run their office. Fortunately, he was available to step in, and he’s a quick learner. Now, we may often think about what we would do if a personal disaster were to strike the primary keeper of the books, but how many of us actually have a plan in place?

Here’s some things to consider to assess how well your business, or your client’s businesses, would fare if the bookkeeper was suddenly unavailable, either due to illness, death, or other reasons:

1. Passwords

Is there a master passwords list, and does someone beside the bookkeeper know how to access it? This list must include User IDs, Passwords, and Security Question answers for the books, online banking (checking, savings, credit cards, loans), payroll service, major vendors, and 3rd party apps such as Bill.com, etc. The length of this list, once you sit down to create it, may surprise you.

2. Programs

Do you know all the programs which are used in association with your bookkeeping? The master password list will help. Here’s a plausible scenario: a QB Online file with 3rd party apps including ReceipBank, Bill.com, Gusto, Avalara’s Avatax, and Fishbowl inventory. Does someone outside of the bookkeeper know how all these moving parts work together?

3. Deadlines

A small business can have many different filing deadlines. Just to name a few: payroll submission and payroll tax returns; sales tax filing; invoicing – A/R; bill payments – A/P; city and or county filings; quarterly or other tax payments. Do you have a master calendar or computer program which you can refer to for filing deadlines? 

4. Procedures

Does anyone besides the bookkeeper know which bills are paid by check, which by credit card, and which are on ACH? Does someone else know how to reconcile a monthly bank statement? The questions are endless. So the real question becomes: Does the office have documented procedures?

If someone had to quickly step in to do the books, is there a manual they can reference? I would say 90-95% of the time the answer is No, and in the 5-10% of the time when the answer is Yes, the manual is not up-to-date. Think about that.

While investing the time in creating written procedures has an up-front cost, the time and cost savings down the road can prove invaluable. And if you’re going to invest resources in creating a manual, schedule time for regular updates to the manual.

5. Cross Training

Is anyone else in the office trained to do some or all of what the bookkeeper does? Can one or two people step in, or is there a professional you know to call for help? In the instances of your own bookkeeping or accounting practice, are you a Sole Proprietor? Who would know what to do on behalf of your clients, if something suddenly happened to you? 

Conclusion

We all know we should have disaster recovery plans in place, but usually we are thinking in terms of data recovery. We must also think in terms of bookkeeper recovery. It would be better to have a plan in place, than to have to scramble to fix an already bad situation.

Jody Linick is an AIPB Certified Bookkeeper and a QuickBooks Certified Pro Advisor.  Her company, FitBooks Pro (formerly called Linick Consulting), specializes in remote bookkeeping services using hosted QuickBooks and QuickBooks Online. You can find her series of Blog posts here.

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By janlockie
Feb 23rd 2018 22:48

Thanks for this article Jody. Ironically, I read it just before heading out for an appointment with a client on this very subject. I put together an info sheet for her on where everything was and how it could be accessed. We discussed my Emergency Plan, who would contact her and how she could use the information I was giving her to transition to a new bookkeeper. I found very little info when I started researching this topic and looking for sample checklists and communications. Other professions offered some useful tools but no bookkeepers.

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By Sjane1136
Mar 3rd 2018 07:23

Excellent article, Jody. I ALWAYS instruct my business owners to review certain things and not worry about the "trust" issue. There is a difference between trust and good business practices and if the bookkeeper has a problem with that, then maybe he/she isn't the right bookkeeper.

I go one step further: I suggest that the owner have the bank statements, credit card statements, etc. actually mailed to their home...That way the mail cannot be intercepted at work.

I would also suggest doing a "Proof of Cash" style of bank rec. This involves not only reconciling to the correct balance, but also reconciling the intra-month activity. That is, the reconciliation would show that the amount of deposits on the bank statement equals the amount of deposits on the books. Otherwise, the bookkeeper, while not necessarily stealing in the gross sense, could use the company's funds by taking money out, using it and then putting it back in before the statement date.

Furthermore, a prudent business owner should review the bank account online daily to keep up with any suspicious activity.

My Blog - https://getschoolsupplieslist.com/

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