What do you do when clients don't learn?
I've been working, or attempting to work, with a new client for approximately 2 months now. It is a small service based business with 6 employees. I have yet to meet either of the owners of the company, a family duo. All of my contact has been through the Office Manager who requested my services. I have been tasked with cleaning up their QBO file, which is the biggest mess I have ever encountered, and an ongoing every other week relationship to ensure their books stay clean. I'm having a bit of a moral dilemma as well as a lot of frustration with the Office Manager.
My biggest concern is the lack of attention to detail that the Office Manager is displaying. Here are a few examples:
(1) She runs Payroll through QB Payroll. At the first of the year there were small tax amount changes which affected the checks by a few cents. Instead of accepting that she ran the checks in QB for the new amount then hand wrote checks for the 2015 amounts.....every week for 5 months until I was called in and told her it needed to stop. There have been weeks where no payroll was recorded in QB but handwritten checks were issued. There have been weeks where payroll was ran 2 and 3 times.
(2) Another concern is how many times I have to ask for information before it is provided and how many times I am re-correcting transactions because I am told one thing then a few weeks later told something else. For example, vehicle loan payments are coming out of the business checking account. I was on site with her and asked if they were business vehicles. She said yes so I walked her through setting up the liability accounts and we reclassified each transaction to correctly account for prin/int. She has now, a month later, told me that all of the vehicles are for personal use and need to go to Owner's Draw so I now have to redo all of those transactions.
(3) Another example is payroll taxes. She has not consistently been using the Pay Payroll Taxes feature and instead pays it and only accounts for it when it downloads from the bank so it all goes to one liability account. Their 2015 federal taxes show a huge overage while SS and Medicare show very few payments have been made. The amount of overage on Federal vs the amount not paid to SS and Medicare match. 2016 is also going down that path. I have been asking for 2 months that she provide me with a printout that breaks down where each payment was applied so that I can manually correct them and she, just a few days ago, gave me a copy of the bank transactions with nothing more than the amounts that were paid but no detail about how much to federal, SS, and medicare. Unfortunately they got behind on their payroll taxes and have been making payments so it's not a simple and clear reclassification.
(4) Another concern is when I send her an email asking about a specific transaction and am routinely told I don't know or no, it was not for that with no further information and when I ask for more information she is beginning to get quite snotty with me.
(5) Another big concern, I don't know why she is doing it, she is saying she hasn't but the audit log says otherwise. She has been deleting transactions after they have been reconciled.
(6) Another one is they offer contract services for a large company and sometimes receive payment for up to 100 invoices at a time. She will receive payment towards the customer invoice for most of them but says she gets bored with it or doesn't have time to deal with it so the remainder is applied to a general services account and they have almost $50,000 sitting in uncollected A/R that is 90 or more days past due and she says they have no invoices that are that over due. I suggested they start creating all of the invoices to the larger company but that is something they are not interested in doing. That is another area where I have asked and asked and asked for a printout from the checks so that I can clear those old invoices and I'll get one here and there but not all of them so I can't even completely clear March at this point. Those are just a few, I'm sure you get the idea.
My moral concern is that this woman just does not seem to get bookkeeping and for some reason thinks I can magically figure it out without her providing any information or documentation. Unfortunately she also thinks she is a QB expert which she definitely is not and does not want to take any kind of direction at all. She has begun asking when they will have an accurate P & L and is getting upset when I tell her I cannot provide one until I am given the information I have asked for and can ensure all of the transactions are correct in the Chart of Accounts.
There are a LOT of personal purchases coming out of the checking account. They were supposed to open a personal checking account this week so that money could be transferred between the business and personal account but to the best of my knowledge that did not happen. I have approximately 100 transactions sitting in a Miscellaneous Expenses account waiting on her to tell me what they are for and that's just for Jan-March. I have a feeling at least half of those are personal items. I have printed out the account, I have sent emails, I have taken a printout with me when I have met with her and she says she will take a look at it and let me know but never does. She also just doesn't seem to care. I've tried training her, I've tried explaining, I've tried showing, and it just goes in one ear and out the other. I feel like I have a responsibility to have a conversation with the owner but my requests to meet him have not been answered.
A little background, she is a HS friend of the owner's wife and was begged by the wife to take this job. My gut tells me it had nothing to do with her abilities but more to do with the fact that the wife didn't want to be stuck in the office by herself and wanted her friend there. That also puts me in a sticky position with having a conversation with the owner.
I did have them sign a contract and part of my contract, in legal mumbo jumbo, addresses bad info in, bad info out so I know I am legally covered there if they get audited. I have also began making sure all communication is either an email from the beginning or a follow up email is sent after conversations.
Another one of my concerns is that I quoted a monthly rate up front and I have gone waaaaayyyyy over that. I included a small buffer for myself in case it took longer than expected but I based it on how long it would normally take me to handle an account with the amount of transactions they have and reasonably being able to provide some training to help make sure the transactions are more accurate from the beginning. I don't have a problem with going over the quoted amount in the beginning so that I can ensure everything is up to par and I know I am working with a good set of books but at this point it has become very clear that a monthly clean up on a large scale is going to be a necessity and I will need to increase my rate. They are going to have a problem with that.
Does anyone have any suggestions? I would really like to keep this client, I recently lost a large client....they grew to a point that they needed someone full time and I couldn't do it so I have taken a pretty big financial hit and need to try keeping this one if I can.