Caution… this is a particular pet peeve of mine when it comes to bookkeeping, so I will try to address it without being too critical and dwelling on it for too long =)
Every month, we prepare a QBO Transaction Detail by Account report for our clients, which proves to be an invaluable asset during board meetings.
This report comes in handy when clarifying why a specific account exceeded its budget or had unusually high expenses. It provides a comprehensive overview of all transactions within that account, enabling you to pinpoint the exact transactions contributing to that total.
If your bookkeeper presents you with a similar report monthly, take a moment to review your transactions and ensure that the Payee/Vendor names are being recorded. It’s surprising how many clients overlook hundreds of missing vendor names.
In my view, this indicates sloppy and negligent bookkeeping. How difficult is it to enter a name! (I did warn you this is a sensitive topic for me =)
Here’s why this oversight is a bookkeeping mistake:
1) 1099s! Inaccuracies may arise in the amounts reported for payments to independent contractors due to missing vendor names in your accounting records.
2) If another bookkeeper fills in or your regular bookkeeper takes time off and someone else assists in their absence… they will need to trace back through the accounting history to allocate numerous transactions. The most straightforward method is to search for the vendor and review which account had historically been assigned to that vendor’s transactions. Without a name, this becomes impossible.
3) Creates an opportunity for fraud! Without names on expenses, unauthorized or fraudulent expenses can slip by unnoticed.
That’s all for now! The following section addresses indicators that your paid bookkeeper might not be giving their best effort for your church or nonprofit organization.
