Spousal bookkeeping: why I recommend divorce

Okay, so I don’t really recommend divorce.  But, with a spouse as bookkeeper, you as a business owner have some unique challenges to face. 

First of all, you can’t fire your spouse if they are incompetent.  And, they are quite likely to be incompetent.  No offense meant to your spouse.  In fact, most bookkeepers today are incompetent.  This is in large part due to the advent of accounting software, and more specifically to the dominance of QuickBooks in the accounting software market.

Before accounting software, there were bookkeepers, and there were spouses doing bookkeeping.  These spouses would have taken accounting and/or bookkeeping classes at a local college or university, or even self study classes.  They took these classes so that they would become competent bookkeepers and accountants.    Suppliers, bankers, creditors, and regulators all relied on accurate accounting information from their small business clients.  And, before on-line banking, the only way to know what was happening in the company bank accounts was to keep up to date records and to timely reconcile the bank accounts each month. So, the bookkeeper’s role and competence were critical to the success of the company.

Businesses today have the same stakeholders that they did 50 years ago:  lenders, creditors, suppliers, regulators, taxing authorities, owners, family members, etc.  They may even have a few more stakeholders:  the neighborhood, the community, employees, and the environment, if they choose to recognize these stakeholders.

So, why do we give these stakeholders far less accurate financial information today than we did 50 years ago?  It’s a question that has troubled me for the last decade or so as I have seen the quality of in-house financial information of small businesses decline substantially.  On-line banking is a partial contributor to this decline:  we think that by checking the bank accounts every day we “know” what is going on.  But the other main culprit is the dominance of QuickBooks in the accounting software market.

QuickBooks is marketed as the end-all/be-all accounting system that anyone with half a brain can set up and use, and that can do all the accounting work for you so that you don’t do much of anything.  This makes it possible for an untrained person to think that not only is QuickBooks a piece of cake to use; accounting itself is not something that requires any knowledge, skill, or advance study.  Heck, maybe you only even need a quarter of a brain to do it. 

As anyone who has taken accounting classes will tell you, nothing could be further from the truth.  And, as anyone who works with any kind of software will tell you:  learning any software package requires time, skill, knowledge, patience, study, and problem-solving abilities.  In our fast paced world, it’s easy to buy into the idea that “the software can do it” so we don’t have to. 

So, here’s what I recommend for those businesses with a “spousal bookkeeper”:  invest in college or university classes or other form of training for your spouse.  Talk with your CPA about problems with the current accounting system and ask them for their frank assessment of your personnel and recommendations for improvements.  Ask your bookkeeper for their frank assessment as well.  Most people don’t choose to be incompetent, but they sometimes need prompting to address a problem.  This way, maybe you can avoid divorce after all, and  have timely, accurate and reliable financial statements as well.


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