Ramifications of a Bad Bookkeeper
27 Feb 2025 · 32 min
In this episode of Accountants LawPod, hosts Lynda Artesani, Sarah Prevost, and Stephen Libhardt discuss the wide‑ranging consequences of poor bookkeeping in law firms. They begin by describing the annual headache of 1099 and W‑9 collection, especially after last‑minute changes like Venmo’s new reporting rules, and the pushback they receive from vendors and clients. The conversation then shifts to deeper accounting challenges unique to legal practice: trust‑account handling, advanced client costs, and the risk of overstated revenue caused by duplicate entries or mis‑classifications, illustrated by a "million‑dollar" mistake where a bookkeeper entered the same transaction multiple times. They share real‑world anecdotes of missing W‑9s, faulty vendor onboarding, and software quirks in QuickBooks, Clio, LeanLaw, and other platforms, emphasizing the need for three‑way bank reconciliations, re‑class tools, and careful review of backend T‑accounts. The hosts also explore the professional side of bookkeeping for attorneys, covering imposter syndrome, ethical responsibilities, the importance of understanding bar rules, and the value of honest communication with clients. Practical advice includes avoiding transfer entries, locking down passwords, establishing clear vendor onboarding workflows, and investing time in learning the software’s hidden features. Throughout, they stress that a bad bookkeeper can cause massive financial, tax, and compliance fallout, especially for solo attorneys who may opt for cheaper, inexperienced services, ultimately costing more in remediation. The episode ends with a call to action for listeners to subscribe, join their mastermind sessions, and reach out with questions.
Chapters
Welcome to Accountants LawPod, where accounting professionals and law firms converge. Hosted by Lynda Artesani, Sarah Prevost, and Stephen Libhardt.
Hello everybody, and welcome back to the podcast. Hi Lynda and Sarah, how are you?
Good, how are you?
How are you?
Good, good. We survived January, huh?
Ooh, no, I'm kidding.
We're recording this right after January ended, and you two stayed I still have hair, but I didn't keep any.
It all came out.
It all came out. Yeah, yeah. But, you know, January is always a lot of fun and a lot of learning. Don't you wish?
Have you wished your whole career that you'd have an easy, like, a January that's like November? And it never happens. No matter what you prepare for, no matter what you do, it never happens. You get the freak out people that want their records the first day of 2025. Yeah.
Yeah.
And then the tax people annoy me because they send out these notes like, we want your tax records, and they don't realize that then that throws those people on our back. And we're like, we've been doing the work. Look, we've been doing the work, but we're trying to get 1099s out. Please give us some grace and space.
Yeah.
Like, this was a brutal 1099 season for some reason too. My goodness. Yeah, I remember last year yours was, Sarah.
It was horrible last year. Well, because the last-minute change that occurred with the whole Venmo, right? Oh crap. And we had sort of not just advised, but like had records prepped in that space. And then we prepared better this year. We prepared. But, you know, I will say my friend, I adore her, Nicole McKenzie on LinkedIn wrote 1099s are stupid, that's all. And I'm like, hallelujah.
Oh, so true, right?
It is so true. They need to have a better system.
Oh my God, it just— it's just so cumbersome. And we prepared like crazy this year, really. I mean, in every single meeting with the clients, we'd, we'd tell them, you need these, these W-9s and you need the whole thing. And we got up to January and there still were 10, you know, 10, 15 missing ones.
And I feel that if you're going to require this on a government thing, then you need to make the EIN and the type of entity structure available. Oh, so that this is not a friction point. I mean, it is.
Yeah, you're right.
And you have people straight out saying, I'm not going to issue them, or I'm— you're not required to give me one. I never had to do one last year. I'm sorry, do I have to give one to my landlord?
Yeah, that was a big question. That, and also they don't have it in their QuickBooks file, so you go to file it and the one thing that's missing is not all the ones you got from all the people, the vendors. Your own client doesn't have it in their paperwork. Like, if there's a new client It's not in there now. You still can't file them without theirs.
So it's just crazy. It's crazy. So yeah, there needs to be a better— but whatever, we're done now.
And you know, that segues into what we're talking about today, the ramifications of a bad bookkeeper, because boy, oh boy, if they don't know and don't understand legal accounting and the types of W-9s or nonprofit exempt certificates and all the different things that you need —or how to do W-9s, or 1099s, I should say, on a, on a trust account, right?
Right.
Or just flat out don't know what a 1099 is and didn't know they had to do this task, and all of a sudden they're tasked with it and they have no clue what that is and where to start and where to go. And you only have a month, and a lot of times you get pushback when you try to retrieve them because really getting them at the time of payment is optimal. But if that didn't happen, try to get them from people. And, and the pushback is always fascinating. Like, we, we get the most incredible pushback. We just look at each other like, this— I don't understand. We're not asking for blood here. We're just asking for your tax ID.
And don't shoot the messenger. We're trying to help you. Email it.
If it's your Social Security number, please don't email that. Or, or client, don't send us a list of everything in an email that might have somebody's secure information. That's why Florida is the best rates are because they have it all on a, on a, a You can look it up.
Well, they, you can look up the EIN and there's another state that you can do that with too. But, and, and the entity structure, so at least you can validate it and which is great. But, and I think that should be a requirement really.
Yeah.
Never mind this BOI thing. This is what we should do. Exactly.
Well, for one of our firms, we, we wrote up on Friday afternoon, I wrote up a, a workflow for them for, and I called it onboarding your vendor. And I wrote the whole thing and they were very excited to get that. They were like, okay, this makes sense, we'll do this.
That's nice.
And I'm like, do not, do not send a penny to them until you get the W-9. And like, this was a firm, love them to death, love these guys to death. They did a really good job of getting 99.999% of their W-9s all year, but of course one was missing. And then when they asked for it, it was a 2003 W-9 form that the vendor sent, and all it said is corporation. It didn't say anything else.
I wish they put email on that form so we could have the emails too. Wouldn't that be nice if we—
Yeah. I know there's, there's a lot of wishes I have, but for bad, I mean, if you're if you're not tracking it right, like what you're saying, like bad, bad work product, if you're not tracking it right, if you don't know what you're looking for, if you're not a specialty in this area, and then you've got all these questions, which we did see a lot of. We tried— Lynda and I did try to answer a few, but it comes to a point where it's like, you got to cut your teeth somewhere on this stuff. It is—
Let's— You shouldn't go into working with lawyers blindly because it really has the complexity of trust accounting and advanced client costs. And it's— you, you Usually most industries you can kind of fake it till you make it. Not all. There are other ones that are difficult as well, but you really should go in at least minimally look up your bar rules where your attorney's practicing and educate yourself just in that piece of it.
Lynda, isn't it easy? What do you mean? Isn't it easy?
Oh, it's simple. Yeah, it's simple.
Try it out, like—
But, and don't do transfers. That's my best two things, points of advice. Okay, we're all done. Don't put transfers in your bookkeeping.
There was her rant. She's off her step stool now. No, I'm kidding.
No, it's true because that messes everything up. People just transfer because QuickBooks goes, hey, this is a transfer. And it's like, click, click, gone. The transaction's gone and it's not right.
I think ultimately though, I totally agree with you. Regardless of how you choose to do the work, you have to understand the body of work that you're doing.
You have to know what you're doing.
You have to know what you're doing. If the software does it one way and you do it differently, that's your business. But—
I think you need to know how the software works in the backend. Like, you need to know what's happening behind the— the curtain when you're looking at the software because, yay, it's great, I've got Clio, I've got LeanLaw, I've got, you know, enter the name of the software. But if you don't know what it's doing in the background, you're gonna have trouble understanding this to transactions that are sent across. And you're gonna see transactions coming across and you're probably gonna book 'em into the wrong bank account 'cause, oh, those are trust retainers. But really those were payments of invoices that should have been in the operating account. And that's when you get really, really messy. And then you're maybe duplicating it someplace else.
How about the—
Double revenue and—
How about the million-dollar mistake in advanced client costs that we've seen?
Oh yeah.
Was it that big?
It was, it's over a million.
Oh my goodness.
What happened? Goes back years for bad—
Goes back to desktop.
Bad bookkeeping.
And the bookkeeper just, I don't know what, I have no clue what this person was thinking. So I tried to figure it out with one of our staff and it was like, It was like she just had like Tourette's or something. She kept hitting the same transaction in and she kept putting it in like 3 or 4 times, the same transaction, the same day.
Oh my.
And why didn't the tax person pick that up? Because it was, it was just putting all this money into billable income and it didn't, it was just putting the same transaction in 3 times, 3 times.
So the cost receivables were being put into billable income. When they were, when they were reimbursed.
I don't know why she entered this. Nobody knows why. It never made any sense, but it was for a large amount. And not only did she put the transaction in once, she put it in 3 times, and she did that in multiple transactions. So she did it multiple times where she replicated a transaction. So not only did she make the mistake, she made it 3 times because she entered it 3 times.
So let's unpack that a little further. Were they working with a billing software? No, PI firm. So nothing was being linked that would bring it— wow, I wonder how that happened. Interesting.
They do have a software.
Oh, they do, yeah, they do have a software.
But they don't use it absolutely in a way that makes like the owner—
They don't use it fully.
It is, it's almost like just a resource of information if you're—
Were there cost receivables on the P&L report or on the balance sheet?
That was mostly balance sheet entries that were made.
And then it would go to—
now the accountant— now the company has changed and people have left and there's only one person here and they had to break it all up. And now they're sitting there with this huge number in advanced client costs. That's not true. Now you got to get it off. How do you get it off? How do you get it off the books? It never should have existed. And so let's— yeah, let's go down this— book it into billable expenses. But now you've got an inflated— but it's an adjusting entry. But now that you're reversing—
Think about it. It's an adjustment entry for overstated revenue. For how many years?
Overstated revenue. He paid a lot of taxes on revenue that never existed.
Exactly. Well, then you're going to be heroes unpacking that. But let's, let's go down a trail here then. I'm— the three of us, when we started out working in this industry serving attorneys, did not have the tools available to us that a new person today does.
So true.
Okay, so, you know, how do we drive people? What's available? Let's talk about that, you know, to avoid becoming a bad bookkeeper, because a lot of people get attracted to working for attorneys thinking, oh, this is gonna be exciting. I get to see the backend, what the attorneys are doing and all this sort of stuff. And I'm gonna make buckets of money.
And they don't— They're kind of recession-proof. I mean, that was one of my guiding stars when we were trying to figure out what to do.
Right, right.
It was definitely, I had to, had enough of the construction industry to know that I didn't want to do that. I don't wanna do that. And—
Although some construction industry people are doing just fine.
Really well. Yeah. But for me, I looked at this pattern that I had on multiple people and I'm like, I don't wanna ride that because if I put all my eggs in that basket and then something happens and all of them, I, I'll be sitting like some people did in the restaurant industry during the pandemic, that, that was just— and fortunately that those people survived it and pivoted and figured out other ways to help their clients. So they, instead of taking that as an, oh my God, my income's dropping moment, they actually help their clients and maybe increase their revenue in some way. I was, I loved watching it from the outside because I had some friends in it and it was interesting to see what they did because my heart went right to them when I heard, you know, what was happening there when everything shut down.
I really think beyond that though, we have a passion for this. We enjoy.
Very key. Very key.
This line of work. And regardless of the type, do you have a, sure, I worked in construction. Did I have a passion for it any longer? No, I did not. Close your eyes and do the work. Fine. I wasn't interested. I wasn't interested in the multifaceted. I like very specific trades if I do work with them. And it's— you got— it's like now it's just down to one. I only like—
No sales tax and no inventory. Check, check. There's two boxes I would love never have.
Some people work like that.
Some people like that. So if you like that, that's great.
Yeah. And some people really love the puzzle of manufacturing.
Yeah. Or puzzles too, though, like convenience.
Could you imagine doing franchise convenience stores? Like, I couldn't. Like, I'm thinking of like that kind of stuff. Like, I— but that works for some people.
Well, you know, sometimes when we take on a new firm who has had a less than stellar— I'll be kind here— bookkeeper, there's a— it's a challenge to educate this new client in— you don't want to disparage anybody ever. You don't want to— You don't wanna disparage the poor bookkeeper who got in over their head.
No, but don't you feel bad for the client who paid somebody?
Yes.
Now they have to pay us to fix it.
Or the client who hires us to fix it and realizes that they're in a bigger mess than they thought.
Yeah.
And it costs them more and you have to educate 'em that way as well.
Yeah.
So true. Well, the part too that I, to Lynda's point, we've had this occur over the last few weeks as we're looking at a set of books and, Part of me is like, well, was the decision money-based? Because if you're hiring a generalist and you're having them do this because they say they can do it, that's, that's a problem. Is the decision made with the right people? Like one person— Is it the right firm? Well, some people hired the right— what they thought was the right firm, but the byproduct was coming out at such a slow rate.
It's kind of like, well, they like didn't get their records from like last year, like February. They haven't had their records at all from February. And the person just— they either took on the work and then didn't have time to do it, or I don't know why you would take payment and then never do the work.
Yeah.
So, well, you know, one of the ramifications of a bad bookkeeper too is when you're a brand new solo attorney and you have no money, you know, every penny has to count. And you hire the bookkeeper at a couple hundred dollars a month instead of the, the more experienced one at a, you know, a few hundred dollars more a month. And then down the line, you realize that you're in a mess and you have to go find another bookkeeper to clean it all up, which ends up net-net costing you more in the long run. That breaks my heart when I see that.
It makes us feel bad too. It's like, that's our— right?
So that's our industry. You're right.
Yeah, that wouldn't be out there. And it's there. And I think sometimes people don't go in with the, like, oh, I don't know this, but I'm just going to do it anyway to get the money. I think they do it, they figure they'll get to it and they'll learn it, and it doesn't happen. And it's not— I don't think it's something you can learn overnight. So you want to produce a good work product back, you want the results. So you sell the results, you want the result for your client. And The fact that most of every single one that we had come to us last week that was looking for a new bookkeeper, none of them had 3-way bank reconciliation provided.
Oh, wow.
So, and then they know it's part of compliance and you can see the pain in their face because they're like, I know my books, you're going to see it. My books don't add up. And they're like, okay. And then when do you think they were? Um, pretty confident on X date that they were okay. And then sometimes we get in there and it's like, oh my God, we went into this weekend. I'm like, oh my God, I'm on 2019. That's the last time I see it's balanced. 2019. You know, then we have to be the bearer of bad news. But, yeah, it's, it's hard. And I hate to see it because I feel badly that this is something that's occurring for somebody. And how do they know? What questions could they ask to understand that the person that they're speaking to— and you can tell, we know in our conversations that we have with a client, a potential client, they sit there and they're like, you've already asked me questions nobody else has ever asked me. So I already know that you know your stuff. We can, we can tell in our conversations just because we're talking the talk with them. I think that that's something that if you want to go down this road, you, you need to like start with a small account. Don't, don't go to a big complex one.
Right.
And also you should really learn the processes and, uh, don't charge too much if you don't know too much. Don't overcharge because As much as I think you wanna sell for your value, if your value isn't gonna be provided there and you're learning, you're gonna have to let them know that I'm gonna charge you this, but I'm gonna learn with you. I remember doing that with my first attorney client. I was like, look, this is an industry. It's new to me. I'll help you. You help me. He just—
You were honest. That's what I love about that.
Yeah. I had to be because I didn't wanna say I knew everything about law firm accounting, but it really, that's what piqued my interest and I got really involved in it and really liked it. Yeah.
Well, and you know, the thing too is, is You need to realize, or you need to always remember, attorneys are trained at law school to question, question, question everything, to challenge things, to ask these things. And for a brand new bookkeeper to avoid becoming a bad one working with law firms and new attorneys and all that, you're going to have imposter syndrome. It's just part of the pain that you have to go through, and you need to recognize that and you need to embrace it instead of run from it. And understand that you don't have to answer every question right on the spot. But with that said, tell the attorney, I will get back to you by Friday afternoon at 3 or whatever, and create, create that sense of urgency and that sense of comfort for them. And then call your associates out there or do whatever you have to do to figure it out and get back to them, and you'll be a hero. But it takes time. Yeah. It takes time to do this, and, and part of the imposter syndrome is to say to yourself, I'm just terrible at this, I'm never going to get it. You can, you can, and you have to be patient.
Again, some people, some people have to— let's be honest.
Yeah, yeah, yeah.
And, and let's be honest on the other side too. If you're an attorney listening and you have the wrong— you've hired the wrong firm, or you have the wrong person in the wrong— it is not the problem for someone like us, like people that are used to this style of work. It is not our fault. So there needs to be grace on allowing time to fix this stuff and clean this up.
Yeah.
We're not in a position, I think in our tenure, I should say this, in our position, we're not in a space where we're just like, let's go change this software, change this software, change this software. We're in a space where it's like, hey, what do you have? Let's do the best we can with what you've got.
Right, right.
Financially, if it makes sense, because you're using 70% of the product and you're not willing to open up the rest of it or something. All right, let's have that conversation. That's stage whatever. We're professionals in this space. And so it goes both ways.
It does.
Like Lynda is, I'm in the same way. I started out in the same, it's slightly different, but started out in the same where it was like a mutual agreement. I'm gonna help you, you help me. Well, let's learn this. Jointly. I just need better financial records. Okay, no problem. Let's do that. Um, but now, you know, as to your point earlier, tools, software is getting developed faster, things are changing quicker. We, Lynda and I, this morning with our own team meeting, had to go in and show— it was a very complicated way of doing something inside the software, We could have done it two different ways, her and I. We ended up coming up to the same thought process and it worked. But that's the thing, we have learned how to handle this and we know the software that we're dealing with. Whatever the ledger system is, whatever the management system is, it is really fundamental if you're going to start and say, how hard could it be as a bookkeeper if you're going to start in this? You really got to give your spouse safe, safe, your safe, ah, can't even talk. Yeah. Give yourself the space as Lynda did earlier in her, she said, look, I'm going to make this change. I gave myself a runway. Now I'm going to really make this change. And she gave herself time and gave herself space to do it. And then ironically, I walked through the door and we started doing it together and we did the same thing. We gave ourselves time to learn it in a more deeper, —in a deeper kind of way of doing it.
And we kind of definitely fed off each other on that too.
We did, yeah. But that was—
And in my experience, I worked in law firms. So I had that experience and—
Right. You were boots on the ground, Steve.
I was boots on the ground. But what was really unique along that journey was, you know, working in different law firms with different types of law. Same thing, I would go in and they'd go, "Well, do you know how to do whatever?" And I'd go, "I don't because I've never worked in a firm that does this, but—" I can learn with you, like you said, you know, and, and that served me well working in various law firms because you can't know it all.
I think it's wicked cool, honestly, to be on the ground like that. Like, she and I, I feel like what Lynda and I did was we did that. We have the same work ethic, we roll up our sleeves, we are a no-fuss kind of person when it comes to this kind of stuff. We have zero tolerance on certain things and we just And we try to think out of the box. We try really hard.
I mean, we think alike, which is what makes things better. And if there's something that comes up and I'll be like, I don't know, Sarah, I don't think this sits with me. And we'll just talk about it. And then maybe we'll make the decision one way or the other, but we'll kind of talk about it because sometimes that happens or something. It could be the opposite. Something wouldn't sit well with her. I don't know if we should go down this road, you know, just kind of work through it that way. But I think for sure, if you're just starting out in this and you're trying to navigate through the waters of legal accounting, you really have to know some of the basics before you start. Understand what a trust account actually is. Understand how the transact— where they, the transactions sit, how it affects the income for the attorney. Uh, understand the advanced client costs, 'cause that's a whole— those two sections are really important to understand. Nevermind like the rest of it when you're looking at reports and reporting and all that. But part of reporting is a three-way bank reconciliation that you can't produce outta QuickBooks alone, and you can't produce outta Clio alone. You have to have another tool. Mm-hmm. 'Cause if the parts don't connect, they're not all there. So even though Clio has a reconciliation screen, it's really hard to pick that up, pick that ball up if the client's been existing.
Yeah.
You just can't. It's no way to really force that. So it's definitely something that, and a lot of times you get into the product and you can see when people are trying to reason through like, why is this happening? It can be something as simple as how the income has been booked, and you're going to look at what something was done in the past and think that that's correct, and it's probably not. If there's invoices and no payments, or invoices and payments and undeposited funds because nobody thought to put that down into the bank, you know, the bank account, but they've just been putting things into the bank feed. I mean, there's so many ways things can go wrong, and you really want to make sure your records are accurate. And if they're not— Right. You don't want to make— pay taxes on something that you didn't even earn.
Is wrong. Yeah. Well, what about Steve? Can I ask you this? Because you, you do teach at, at your bar. Um, so compliance, the compliance side. Sure, the attorney is the owner of the firm and the trust account is in the firm's name, but we're also— we have to be compliant to the rules, right?
Absolutely.
Okay.
So, absolutely, we have an ethical— we have just as much, in my opinion, of an ethical responsibility as the attorney does.
Okay.
You know, absolutely. And back to what you were talking about, Lynda, with cost receivables, there are so many attorneys that don't even understand the flow of that.
It's interesting. We talked about marketing this week with law firms in our Law Lab group, and I'm like, I can't get over just writing an article explaining what advanced client cost is. Yeah. That alone in that video, those videos alone get us phone calls.
And—
That we want, the bigger firm kind that we want.
Right, right, right.
Sometimes little firms too, but the attorney knows like something's not right here. And it can be just a matter of the tax person looking at the records going, wow, you have X amount of dollars in billable income and X amount of dollars, and they're so drastically apart. Why? And then that question can open up Pandora's box, basically.
Well, and you know, they'll put the advanced client costs on the expense side, on the P&L. And I'm— and you— it's so hard to— sometimes they just get so locked into that. And even further along the line, the CPA, I find a lot of them don't understand it completely. And so that's a constant, constant battle. And if you're— if you want to be a good bookkeeper, you ride that horse until you're at the end of the trail.
And then fixing that is a problem. A problem, yeah. That can be something that's in the past in a closed fiscal period. So now to fix it going forward, you might have to draw that line and say, okay, this is what we had in WIP, work in process, and make entries to get that WIP to be what it needs to be. And then you got to reconcile all that. And I think a lot of times that never happens. Reconciliation of the advanced client cost account doesn't happen.
Well, and there's the million-dollar mistake we dealt with, which is in that same tone and bucket. And then there's also the thing that you brought up, Steve, that I'm sure you've experienced this, which is fine. You book it one way, but you make the adjusting entry at year end to move it to the asset and/or the expense depending on how you've recorded it throughout the year. Well, you have to know how to do that. You have to— to your point, Lynda, you have to know exactly where the number ties out. Is it reconciled? So yeah, it's, it's detailed work. I mean—
And I'm hoping that the people we taught this morning, the team picked up on one thing in that whole scenario where you're not— you and I are, like, talking back and forth trying to figure out how to make this work. At the very end of doing the transactions, the one thing you said, which I hope they all caught, was open up that balance sheet. Let's see what it looks like after we made the entry, because sometimes it goes in backwards or the wrong way because your brain's so in depth of trying to make this be right.
Exactly.
I hope they realize that. Don't forget that step. That's such an important step. Before you hand off records to your—
Well, and new people, I'm so glad you brought that up. That reminded me, I am continually telling people, slow down, look at what you're entering and go to the other side and see the result of it. You know, if you, if you post, if you post something out of the bank feeds into the check register and you let these wackadoodle comments come over that have nothing to do with it because the AI isn't correct, And then the client sees that on the report.
What do you mean? I thought AI is always right.
I think I like the term wackadoodle comments. I'm going to start using that. What is this wackadoodle?
You know, they are, they're wackadoodle.
All the transactions in QuickBooks have this little more button and it takes you to, in the background, the backend, it tells you what accounts were hit, debit and credit. Your debit and credit is there, hidden.
Yeah, there you go.
So if you want to learn your accounting, go look at the transactions. You know, you made an invoice, it hit AR, you know, debited your AR. Look at how it's hitting the transactions. You can start to learn.
It's a T-account. Don't you just—
Yeah, the T-accounts.
The good old T-accounts. Oh, those are our friends from the past.
I'm counting here, please.
New kids today, they probably think you're having a cup of tea, Sarah. They have no clue what you're talking about.
Let me grab my coffee. This is tea now today. I'm kidding.
But I remember the old days drawing out T-accounts and that's how you made sense out of things, you know.
I literally do that now because my brain gets so muddled into the work that I'm like, wait, let me just back up because we have tools that are creating these entries, but you don't know what the backend looks like.
Well, in QuickBooks, you know, when QuickBooks first came out with desktop way back and then into online, you know, you continually had to tell people it's doing these T-accounts behind the scenes.
Yeah.
You know, and old-fashioned, like, what are some of the other programs? Sage and Peachtree and those sorts of things. When you, when you meet somebody that's doing accounting in those formats, they're like, well, I've got my T-account in front of me, I have my debit and I have my credit. And but in QuickBooks, I never see the other side of it. And you had a great— you had a great tip there, Lynda.
Oh, I was like, well, now we have AI robots doing it. So those are right.
Yeah, right, right, right.
Done for you, Sarah.
Oh yeah, done, yeah.
We had a client who had, she had a ton of contractors working for her and the bank that they were with would code every single transaction that they didn't know what to do with, that the AI didn't know what to do with. The AI would say it was this one person. Oh my God. And before we came along, they would code it all to that person's contract labor line on the books.
Oh.
And what an unraveling that was at year end, you know, before 1099 season.
Well, remember when you get your first bank statements and the debits and the credits are the opposite of what you use all day for accounting? It's like, hmm.
Yeah. What is this?
backwards.
Or what about the, One of the, you know, if you set up, we've seen this before where people have set up rules and then they set these kind of rules up in different softwares and it says go to this, go to that, go to this without a name, without a vendor name.
Oh, the name, that drives me nuts, yeah.
My daughter and I found one that the bank rule was just had the number 4 in it. Do you know how many transactions went through the number 4? It was number 4. I don't know why.
And it dumps into like, let's say all income or all, you know, The black hole bucket. The black— yeah.
Drill into each one of those and look at them and see what the description is. Look at what you're working with. It's not just automatic.
It is—
Use your tools in QuickBooks. If you're using QuickBooks, use your tools. There's the reclass tool. Use that box. That whole functionality is going to help you see the data and mapped out. And that's one of the better ways to do it. And if you're a tax person, if you're an attorney and you're looking, you want to look at your records, if you're in Advanced, you have the same tools. They gave you that tool. So it's in, it's kind of hidden up in the gear, but you have the accountant tool.
But you have to know how to use it. Let's be honest.
Yeah, you have to because you don't want to go willy-nilly.
I could tell you the tool, but you really have to know how to utilize the tool.
A good bookkeeper would lock you out with a password.
Yes. So yeah. Well, anyways, I mean, this was lively. We obviously have a lot of opinions.
Wait, I want to talk more.
I'm gonna say, Sarah, this is not the same Sarah and Lynda from the weekend where we're both yawning in each other's faces. I said, Sarah, this is not gonna be productive this weekend. We're both exhausted.
I did the best.
She yawned, I yawned, vice versa.
Yeah, well, not to mention all the other stuff that was going on for both of us for like, anyways.
Well, this has been a great discussion today, you guys. And there's so much more to unpack in this subject, so.
Yes, let's do part 2. Yeah.
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Well, thanks, you guys. Have a great week.
Thanks. My brain hurts.
Time for a cocktail.
No, no. Mocktail. We're the Mocktail Girls.
Yeah, we're the Mocktail Girls.
You're the Mocktail Girls.
Yeah.
All right. Well, thank you, everybody.
Thank you for joining. Bye.
