After doing hundreds of of cleanups, I have seen it all. I’ve seen undeposited funds, uncategorized income, uncategorized expenses, unapplied income and expenses, reconciliation discrepancies, comingling. And the list goes on. Over the course of all these cleanup situations, I have come across some that defy all of our expectations for a “normal” cleanup. Today, I’m sharing my scariest QuickBooks cleanup horror stories.
I’ve put together my most chilling QuickBooks cleanup tales for you. Read on… if you dare.
The Tale of the Multiple QuickBooks Personalities
This story begins with a client who came to me using QuickBooks Desktop. This was a few years ago when I worked on QuickBooks Desktop. Unfortunately, this client had an in-house bookkeeper who managed to embezzle $8 million. That’s right, $8 million.
When I started diagnosing the books, I realized that the bookkeeper didn’t just keep one QuickBooks file. She actually had about six QuickBooks files in which she shuffled transactions around so that the business owners never really had any clarity into what was going on with the books.
We learned that she was photoshopping the bank statements and giving the accountants falsified bank statements as well as falsified financial records. As we dug deeper, we saw that she was writing checks to herself, her husband, and her friends and then going back in QuickBooks and changing the vendor name and changing the account category to Cost of Goods Sold.
We ended up having to do a giant data migration project to combine the activity from all the various QuickBooks files into one QuickBooks file and then meticulously reconcile all the transactions and identify all the fraudulent transactions.
The bookkeeper is now in prison and serving time for her crime.
The Tale of the Guns and Snakes
I once had a client who was a gun retailer, and I spent a lot of time working on their books.
Unfortunately, I never had an engagement letter, and I never was clear on how much I was really charging them. Due to some disagreement in management, they ended up terminating my services, and when they did, they never paid me.
If that wasn’t bad enough, I was really scared to go and collect money from them because they sold guns, they had guns, and they carried guns. And to top it all off, there was a snake that they kept as a pet, so it was a little too scary for me.
In this case, it was best for me to walk away from that client and move on. And I learned a very valuable lesson: always work with an engagement letter and charge for services upfront.
The Tale of the Unknown Transactions
The next of my scariest QuickBooks cleanup horror stories is as spooky as it gets. This mysterious tale hearkens back to the days of my very first cleanup client. At this point in time, I’ve worked on hundreds of cleanups and have seen it all. But back in the days of this tale, I hadn’t seen anything yet.
I started working with this client and realized that there were all of these transactions on their books that we had no idea where they came from. When we checked those transactions against their business bank statements, we couldn’t find them.
I kept asking the client, “Are you sure you don’t have any other business accounts or any other source of business transactions?” And she consistently responded, “No.”
To this day, I still don’t know how she got those transactions in there. I’m going to assume that they were probably personal transactions. For my first cleanup, it was really challenging trying to figure out what belonged on the books and what didn’t.
The Tale of the Facepalm
This is the second tale related to my first ever cleanup client. I had worked so hard to clean up the books. I was rushing because they had a deadline, and I worked for many hours to get this clean up done on time. When I finished, I was so excited to let their CPA know that their books were done.
Unfortunately, I got an email a few hours later from the CPA pointing out this really big amount that I had miscategorized. I was mortified because I had messed up. I was rushing so much to get it done that I didn’t stop to just check my work one last time.
After doing a facepalm and kicking myself, I learned a valuable lesson. I started using a cleanup checklist and making sure that I went through the checklist from beginning to end to be sure that I completed everything.
What are your scariest QuickBooks cleanup horror stories? Let me know in the comments. I’d love to hear from you.
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