Help, My Bookkeeper Left! How You Can Be Better Prepared

​What would happen to your business if your accountant unexpectedly quit or was hit by the proverbial bus? How easily can someone else step in to keep the books in order? ​

I recently had a personal reminder of how important it is to thoughtfully consider these questions.

​On a bit of a whim, I joined a fall CPA basketball league. I by no means consider myself a basketball player, having only played a little bit of JV ball in High School, but I’m over 6 feet, still in my 30s (barely), and typically able to keep up. My general thought was that this would be good way to get exercise since I dislike running unless it is in the context of sports.

X-ray of Jason's broken wrist after surgery

I didn’t completely embarrass myself among the fresh-faced CPAs just out of college representing their public firm teams. However, I definitely regretted my decision to play after a bad midcourt collision left me looking at a wrist that was definitely not in the right position. After a long ER visit and eventual surgery to add some new hardware, the recovery process began.

I still do some part-time accounting consulting work for small businesses and being able to type is a key part of getting the job done. Having a wrist that wasn’t working, along with the pain involved, really cut into my ability to be productive. Some of the work I was doing couldn’t easily be handed off, so I had to do my best to continue getting work done despite my limitations. 

Thankfully, the organizations I work with were very understanding and provided the flexibility I needed. Additionally, I had already streamlined most processes so that I could work remotely and meet any important deadlines while I recovered.

Many business owners I talk to find themselves in even more dire situations. Recently I spoke with a business whose controller had unexpectedly passed away from a heart attack while on vacation. While it isn’t enjoyable to consider worst case scenarios, businesses do need to consider “what if” scenarios so there is a plan for what to do next.

So, what can you do? Here are a few best practices to have in place so your books aren’t left in disarray:

• Formalize policies and procedures
• Cross-train staff and utilize separation of duties
• Rely on cloud-based accounting and automation

Let’s go through these in a bit more depth.

Written Policies and Procedures Manual
This one can’t be stressed enough. It is difficult to train new employees on how to initiate, approve, and record transactions. Learning by trial and error is a costly path for growing or maintaining a business. When an employee leaves, employers lose the experience, data, best practices, and other information employees developed on the job. Since this knowledge is often held independently it’s critical to capture it and make it accessible to others. You can do this through documenting workflows, policies, best practices, and reporting deadlines.

Written accounting procedures can take many forms, but they should document the key recurring tasks and the workflow processes necessary to complete them. It takes time and effort to document (which is why it often left on the “to-do” pile and forgotten) and the person preparing the manual isn’t who will be getting the most value from it. It’s not fun, but it’s important!

Some basic elements that should be included in the written procedures are:

• Introduction (including when it was last updated)
• General accounting policies
• Accounting procedures for all components of the financial statements
  • Assets
  • Liabilities
  • Revenue
  • Payroll
  • Expenses
• Accounting policies embedded within each section
  • Segregation/division of duties
  • Signatories for bank accounts
  • Investment restrictions
  • Allowance and write-off of accounts receivable
  • Depreciation years and methodology for fixed assets
  • Record retention of documents
• Financial statement close process (monthly and annual)
• Tax filing requirements
• Budget process
• Exhibits of key forms

It is important that these materials are straightforward and easy to follow. The focus should be on clarity and completeness. You want this document to be usable! Additionally, you should review your manual regularly (on an annual or bi-annual basis) to keep it up to date. It won’t help you much if the manual is 10 years old and the systems and procedures have changed.

Cross-Training & Separation of Duties
It is always a good idea to have more than one person trained on a job. A complicating factor here is that many small businesses find themselves relying on a single person to manage their finances. While the size of the business may make this a necessity, it is important to consider the increased risks this brings, such as:

• Errors (or even fraud) from lack of internal controls and oversight
• Outdated or inefficient accounting practices due to an individual bookkeeper’s narrow skillset
• Disruption to the business if your accountant quits or is unable to work

A business owner or manager can provide effect oversight if they are performing regular reviews of the bank and financial statements and are directly involved in the approval process for transactions. However, if the owner doesn’t have the time or financial acumen to properly perform this function, consider hiring a contract accounting service. Working with an experienced accountant on a part-time basis can be an effective way to strengthen the company’s financial operations.

Over the years, I’ve functioned as an outsourced accounting manager for multiple small businesses. In these instances, there was a day-to-day bookkeeper who did the transactional work. I would come in, weekly or monthly depending on the need, to provide oversight. I would review the bookkeeper’s work, handle complex items, and help the business owner or board understand their financials statements so they could make better business decisions. I was also able to step in when they lost their bookkeeper and provide additional support. Because I understood the business and their accounting processes, I could pick up key tasks in the interim and help hire and train a replacement. Using a model like this can be a convenient and cost-effective option, giving the business access to advance knowledge and support only to the extent they need it.

Cloud-based Accounting System and Automation
For many businesses, COVID accelerated a process that was already underway – moving away from paper and toward cloud-based and automated platforms. Businesses can recognize multiple benefits from cloud-based accounting systems, including:

• Increased accuracy due to automation of tasks

• Improved availability of real-time data
• Enhanced data security through better back-up and access controls
• Lower infrastructure and administration costs with no server to maintain and back-up
• Access to constantly updated software
• An eco-friendly paper-free approach
• The ability to support a remote workforce

When billing, collections, and payment processes can be mostly automated, they are less likely to come to a screeching halt when someone quits. They are also less likely to have errors resulting from manual data entry.

The ASP Team is often approached about providing interim accounting support until a new bookkeeper or accountant can be hired. A cloud-based system allows consideration of remote or hybrid-support instead of limiting your options to on-site support at a physical office. Having this flexibility makes it much easier for a business to access the interim support they need.

Remember, dealing with the unexpected loss of your accountant is always challenging, but you can be prepared to reduce the impact on your business.
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If you’ve lost your accountant, let us help! At The ASP Team we have a great team of experienced accounting professionals that can step in to help keep your business running in all circumstances. 

About the Author
Jason McGill

Jason is a dynamic accounting and finance manager with strong nonprofit leadership and 15 years of experience. He started out in public accounting at a firm specializing in nonprofit before moving over to work directly for nonprofit. He is well versed in analyzing data, internal controls, preparing monthly and annual financial statements, and budgets. Preparing for audits and supporting complex accounting issues is part of the regular routine.
Even after taking over as the practice leader for the ASP Team in 2020, Jason has continued to provide high level finance support to Youth Contact, Forth, Children’s Cancer Therapy Development Institute and Washington County Visitors Association.
Jason holds a Bachelor of Business Administration degree in Accounting and Finance from Walla Walla University, and a Master of Business Administration in Finance from California State University San Bernardino. He also holds a CPA license in the state of Oregon.

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