Episode #027 The True Cost of Rescue Jobs on Bookkeepers (and Business Owners!)

If you’ve ever done a rescue job, you know they can be a source of stress. In this episode, Amy talks about the REAL cost of a rescue jobs, on business owners which is emotional, financial and relational. And examples the impact caused to bookkeepers as a result.

The real message of this story is: “By scoping jobs properly, and communicating clearly, bookkeepers (and business owners), can have a better experience!”

Podcast Info

Episode: #027

Series: General

Host: Amy Hooke

Guest speaker: None

TopicThe True Cost of Rescue Jobs on Bookkeepers (and Business Owners)

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Good morning, thank you for coming back again to join me. Today I’m going to be talking to you about the cost of rescue jobs on Australian business owners, and also on our industry as well. Everybody knows what a rescue job is. Some people call it catch-up jobs, I’ve actually heard someone else call it projects because they don’t like to put the negative connotation of a rescue job onto the client and … What else do we call it? I don’t know, in my proposals I just call the upfront fees and describe what’s actually included.

A lot of the time, I mean I enjoy rescue jobs. I think rescue jobs allow bookkeepers to really hone in on their skills and it is a highly skilled exercise that takes every part of your brain power and expertise to figure out what is wrong with the client’s accounts. For those of you that don’t know what a rescue job is, or if you’ve never done one before, what it is is it’s basically when your clients accounts are in a mess. I guess some people also call them fix-up jobs and things like that.

Normally what it is, normally a business owner’s going to come to a bookkeeper, they’re not going to come to you and say, “I have a rescue job.” Most business owners wouldn’t say that. Some business owners may be aware of the accounts being in a mess, but most business owners are actually completely unaware. It’s something that the bookkeeper discovers once they start to do the work and that’s kind of the worst time to discover it I think. It’s always good if you can discover it’s a rescue job before you engage the client because it just helps to set expectations with the business owner.

Today I want to talk about the cost, or the impact of rescue jobs on Australian businesses and on our industry because as I said, I enjoy a rescue job. A lot of bookkeepers say that they love rescue jobs. But there’s the happy side of rescue jobs which means it’s a good whack of income for us and it’s nice to be able to sink our teeth into something, but on the flip side, what is the impact of the rescue job on the business owner?

I think for years, and I’ve played a part in this so I’m not accusing anybody, I definitely have done this myself, but there tends to be … There can be an attitude in our industry like it’s their fault, which you know, it probably sometimes it is their fault but there’s sort of a little bit of a view that can be taken on actually looking down on the client like they’ve done something wrong and to kind of take the approach of making sure that we, as bookkeepers, make sure that we let them know that they’ve made a whole bunch of mistakes and that they really have no clue what they’re doing.

And so I remember … I mean I’ve repented of that attitude. I’ve turned the other direction. I mean obviously I can still … Oh my gosh, it really is a journey from becoming offended with business owners for all of the ridiculous things that they do, to being able to actually have compassion for them and actually realise that any one of us can actually end up being a rescue job. Maybe we’re not rescue jobs in our bookkeeping because that’s our skillset, although I would say I used to think I was amazing at doing my own accounts. I’m much better at doing other people’s accounts than my own. I remember so many times over complicating things and actually making a mess.

When I used to work in an accounting firm doing tax returns and that kind of thing, I used to … whenever a bookkeeper or an accountant used to come in to get their stuff done by us, I used to always think, “Oh my gosh, so complicated.” They’d give you these big complicated spreadsheets and things like that. I don’t necessarily think that bookkeepers are that great at doing their own accounts, maybe some are but I’ve seen some … I think as bookkeepers, we can tend to get a little but too much into the detail and maybe just practicing our own skills and improving our knowledge in the data flow can get a bit carried away.

But anyway, I’ve changed my attitude, and the reason that I’ve changed my attitude is because me, as a business owner myself, as you know I left my bookkeeping business. I closed my bookkeeping business down and then I decided to restart it again in January, which has been a very exciting adventure. I’ve called it The Bookkeeping Project, so you can check that out on other podcast episodes. I’ve been sharing my journey of restarting that business and everything that’s kind of been happening there.

As I went out of my bookkeeping business the first time, and I started just focusing full-time on running The Savvy Bookkeeper, which is my other business which is connected to this podcast. We basically what we do is we help savvy bookkeepers to identify, find and engage ideal clients online and we do that through pricing. We help them with their pricing, setting up their engagement, their onboarding processes, their website designs and all those kinds of things in that sphere. That’s what I’ve been doing.

I left the bookkeeping business and went into a different business model. So The Savvy Bookkeeper, because we’re not a bookkeeping practice we actually have a different business model to what bookkeeping business would have. I entered the world of all sorts of things that I’d never even really had to think about. One of the things that I did was I set up my own CRM, and I made a dogs breakfast of it. I had to call in a company to come in and fix it up for me, and that was a rescue job. It was expensive for me to fix it. I wasn’t happy about that.

What I started to realise, and this isn’t the first area that I’ve had to call in an expert to come and help me to rescue the mess that I created when I thought that I could do it myself. And so now that I’ve been with the shoe on the other foot in the business, I now understand that rescue jobs, they’re not fun for the business owner, in fact they’re quite stressful and they’re quite painful. I’m going to talk a little bit about the types of impacts that there are on small businesses and on bookkeepers as a result. Then I’m going to just go through a couple of ways that I think that we can, as bookkeepers, protect ourselves and also the business owners from the impacts that are happening here.

We can help minimize the impact, help minimize the pain that happens there. So really I sort of brainstormed a couple of ideas and I really thought it’s financial, emotional and relational. They’re kind of the three biggest impacts that I’ve found. So financial, we can all understand that. I mean the biggest rescue job that I ever did went for nine months and it was not pretty.

This was a couple of years of a naturopathy company who had an unintegrated software where they managed their point of sale and all of their stock and all those kinds of things. This system had never been reconciled. It hadn’t been reconciled within itself, it hadn’t been reconciled against Xero, and also the software was a US based product which didn’t actually handle the GST and the reporting in the way that we needed it to, and so it was quite a detailed process. It was really driven by the business owner who wanted to get everything completely perfect.

Now it’s quite common that when you meet a business owner, they’re going to want to sweep it under the carpet and not take care of it whereas this business owner was the opposite. She wanted to get everything completely right, like to the point of she went back through all their paper book receipts from before they’d integrated the system so that she could really work out what the stock balances should have been. She really wanted to get it right and check it because firstly she wanted correct financials for decision making, but she also wanted to make sure that none of her staff had been nipping money out of the till and stuff like that.

This was a big project, and look, I didn’t know what I was getting into at the time, and neither did she. It really was a drawn out process with her working until three o’clock in the morning sometimes, and sending me emails and all sorts of things. And so it wasn’t a nice experience for her, and although it was a good season income for me, it wasn’t a nice experience for me as well because I could see that she was struggling with it, and so I was trying to support her in that process and just get things up to date as quickly as possible.

We did that but it did take about nine months until we had a really nice squeaky clean set of financials. I think in the process of that two years as well, they’d switched from … They’d needed to upgrade their Xero file, but instead of upgrading they created a new file and then also they changed from being a sole trader to a company or something like that. I don’t know, it was just … So there were extra complications in there where we had to revisit previous files and reconcile higher caps clearing accounts and all sorts of things.

This is like the most detailed rescue job I’ve ever done, whereas other rescue jobs might just be working out an issue within the payroll. Look payroll and GST are some of the two biggest ones, and then in the integration of CRMs and that kind of thing, that’s another big problem. Clearing accounts are a big one. When they have credit card merchants, and especially when they have extra ones like higher caps and Medicare and all those sorts of things. These are really the key things that are found in rescue jobs. These are the most difficult areas of the accounts to get sorted out are those areas, although there are methods that you can follow.

I’ve been asked numerous times by bookkeepers to do some training on that. I am still deciding. So my focus is really on helping run your business, as opposed to helping you actually do the bookkeeping, although over the next couple of weeks I’m going to be running a couple of workshops where I’m going to be talking about how to scope a rescue job, and how to quote for it, how to do a bookkeeping health check and to be able to initially prepare the client for what’s going to be involved so that they can make a decision. I’m going to be doing that, so I’m still thinking about whether I can do some training on actual bookkeeping stuff.

I do really enjoy doing that, it’s just a bit out of scope of what I ordinarily do, but I have been getting quite a lot of inquiries. I guess if the pressure’s on I might just help you with that, but I guess it’s really going to depend. If that’s something you’re interested in just post in our Facebook group, which is Facebook.com/groups/TheSavvyBookkeeper and let us know, because really we kind of go off what you guys need and what’s the most under demand. I will think about that.

But anyway, they’re the main areas, GST, payroll, inventory, CRMs, clearing accounts. That’s where you’re going to find a lot of your issues. Intercompany accounts are another area where you’re going to find mistakes and really … At the end of the day, what a rescue job actually is is a whole lot of reconciling, and guess what? Business owners don’t know what reconciling is necessarily. I think one of the frustrations for business owners is there’s this feeling of, “The bookkeepers always reconciling stuff but we don’t know what that means, and every time I talk to the bookkeeper they’re reconciling and they’re charging me for reconciling,” and things like that.

I think it’s really important to let clients know what that actually means, to explain to them that it’s about balancing the accounts. They can understand balance, like two sets of scales, you’ve got a balance on each end and you want them to equal each other. That’s sort of the thing that we’re looking for. In order to do that you need to understand double entry accounting and you need to be able to explain that to the client in layman’s terms. Don’t start talking to them … you know? I mean maybe you could get out a pen and pencil and start drawing out a T-ledger or something like that. Maybe that would actually help, but try and keep the accounting lingo out of it for the sake of the business owner.

Because that’s the next point that I’m getting to, the first point’s obviously financial. It’s a big cost and it’s not just a big cost on a single business owner or … I think it’s actually a cost on small businesses in our country. I think it actually affects our country on a bigger scale, and the reason that I say that is I’ve asked many bookkeepers how many of your new clients tend to be rescue jobs. Those answers really correlate with what my experience is, which is about let’s say eight or nine in 10. That’s what most bookkeepers are experiencing, so rescue jobs are huge.

The thing that always kind of makes me laugh a little bit in a “ha ha, not funny” way is how the software companies, not naming any names, the accounting software companies are always … Their whole marketing campaign is all around how easy bookkeeping is. Now we’ve even got software … Well there’s one that I know of that’s even starting to offer bookkeeping services, basic bookkeeping services. Now I did hear that they’re not offering, if it is a rescue job then they refer it on to their practitioners or whatever they call them, the advisors, QVO advisors or whatever. Oops, just said their name, but I’m sure you would have figured it out anyway.

I don’t really think that the software companies understand the impacts of rescue jobs, and I don’t know if they actually understand the high prevalence of rescue jobs. I don’t really know if they understand the financial, emotional and relational impact on the small business owner and also on the bookkeeper as a result. We’ve talked about the financial costs, and I guess I can talk about the software companies maybe on another podcast. Not to badmouth any people in particular or any companies in particular, but I do think that the software companies do have something to answer for when it comes to their marketing message and to making sure that they’re telling the truth to people.

I know the truth is not sexy, it’s not appealing, it’s not good from a marketing perspective, but I think it’s also important to realise the repercussions of that. And so I would like to officially … Maybe I’ll just do it now, I’d like to officially call out the software companies and actually start to call them to account when it comes to their marketing message, and that they need to understand the impact of that.

So the emotional toll, let’s talk about that. We’ve talked about the financial aspect of it. I don’t know if you’ve ever noticed, I’m sure you have as a bookkeeper, but dealing with people’s finances’ one of the most painful things that you can possibly deal with. Like I can’t think of many more sensitive topics than … you know? If you can think of a topic that’s more sensitive than money in the entire world then feel free to try and prove me wrong that money is the most sensitive topic.

I think there’s a saying that says, “The love of money is the root of all evil.” It’s not saying that money is evil, but money … To me what that says is money holds a place, when it holds a place in a person’s heart that is kind of out of priority, for example people who value money more than they value others, people that their pursuit of money is so heavily reprioritized over other things in life that should take priority. What happens is when that area gets poked or some light shined into it, what you’re looking at there is a strong reaction. You’re looking at also pain and a sense of insecurity. When people elevate money over other things in their life, they see that as their sole source of comfort and security.

I don’t know if you’ve ever thought about this before but when a business owner lets you in to their finances, their financial affairs, they’re basically letting you come in to a dark room, potentially, and turning on a light. They might not want you to see things in that room. I mean, I don’t know how many of you have ever let anyone come into your accounts, but I know from the bookkeepers I’ve spoken to I would say less than 5% have someone else do their bookkeeping. They always tell me it’s about control.

We as bookkeepers, we don’t want people poking around in our finances, we like to keep it all a bit under wraps. So think about this, a business owner’s coming in and they’re letting you into the most personal area of their life, the most painful insecurity provoking area of their entire life. What starts to happen is you start to poke into areas of emotion. Guess what? I don’t know if you’ve ever realised this, but people don’t really like emotions that much. I mean they like positive ones, but people don’t like negative emotions.

There’s actually, I think to the detriment to our society, there’s a heavy, heavy leaning towards accepting positive emotions and rejecting negative ones. So what happens is when a business owner has a bookkeeper come in and say, “Oh wow, this is a huge mess! You’re really going to have to fix this.” And then they start getting charged all this money. The business owner’s like, “Whoa, whoa. What’s going on? I didn’t even know there was an issue with the accounts.” And so this pokes into this very painful area of like, “I don’t want people to think that I did something wrong or that I made a mistake, or that I purposely claimed something that wasn’t deductible or whatever.”

What you’re doing is, by coming into the rescue job and actually defining that rescue job and pointing out to people all of these errors, you are poking right into their heart. You’ve giving them a poke right in the eye. If your clients start crying, if their eyes are watering or are blood shot and popping out of their head, that’s probably why. Because it’s money, and we get so used to it as bookkeepers because that’s all we do. All we do is poke around in people’s finances all day long. We’re used to it. We’re completely used to it.

Often these business owners never let anyone else into their financial affairs. They don’t let their spouse know, they don’t let their employees know, they don’t let their friends know. Nobody knows what’s going on inside that business owner’s data file except for you. If you come in with guns blazing, like what I used to do, and you start telling people, “Oh wow, look at all these things that are wrong.” You know? Sometimes we do it … This is why I used to do it, because I wanted to secure my place in that business so that I could keep generating revenue from them.

I’m sure not everybody has such self centered motives as I used to have when I came into a business but … I never really fully understood the emotional impacts until I had to go through it myself, until I had someone coming in and poking around. Thankfully they were a lot more gracious than I’d ever been to my clients. They didn’t make me feel like a complete idiot, just partially an idiot for the mess that I’d made in my CRM.

I guess that’s a perfect segue into the next issue which is really the relational impact. I did briefly gloss onto that when I was talking about the emotional impact, and this is where the emotional impact comes in. So picture this, you’re a business owner and you’ve come along and you’ve decided to hire a bookkeeper because you don’t want to do the bookkeeping yourself anymore, or maybe your friend or family member’s been doing the bookkeeping and you need to have somebody come in and take over from them, or maybe it’s an employee or something like that.

The bookkeeper goes, “Oh wow, this is a complete mess. You’re really going to need my help.” The business owner says, “What do you mean it’s a mess?” And you go, “Well there’s this, and this, and this.” And then the business owner, so not only are they getting all knotted up inside because they hate the idea that things have been wrong and you’re just poking them in the heart or poking them in the eye of their finances. Not only that but all of a sudden it dawns on them, “Hang on a second. But I send these accounts to my accountant every year, how come my accountant’s never mentioned this before? Hmm, okay. That’s interesting. And so you’re telling me that my previous bookkeeper, or my wife, or my brother, have been completely stuffing up my accounts. Is that what you’re trying to tell me?”

And so often the clients aren’t that straight forward. Often they’re not going to tell you that. So for example, I’m just thinking of … I went out to see a painter a while ago and I went to … This was when I was running the business the first time. I went out and I met him and his wife in their home, and the wife had been … she’d been doing a little bit of the bookkeeping and the brother was the accountant. I think the brother had been doing all this stuff. I could see a conflict of interest. I remember thinking, “I’ve got to get out of here.” Because I could see there was a dynamic in this business where …

So he’s got the brother as the accountant, and then I think maybe he had a sister doing bookkeeping, and then he’s got his wife kind of trying to do bookkeeping. What was going to have to happen was eventually he’s going to have to speak to his family members who have been completely overlooking the fact that his bookkeeping was a complete shemozzle. Then you have to add into the mix that maybe the family members don’t want to look into that. Do you know know what I mean? You’ve got the case where …

I mean lots of times accountants will see the bookkeeping data file. They don’t really care what a mess it is, they just want to get paid their income so they just whack in a couple of journals and they don’t really communicate with the bookkeeper or the business owner. They don’t really point out anything that’s going on. They just kind of cover it up and whack the client with their bill, and that’s it, all done and dusted. Depending on the dynamics and the setup of who’s the accountant and things like that, you’ve got to really think about what are the relational ties between this business and their accountant and the person that’s been doing their bookkeeping?

You have to recognise that although, I don’t know maybe the business owner knows that the accounts aren’t accurate but it’s in their favour, it’s helping them to not pay tax or whatever, so that’s fine. Obviously there’s the dodgier situation, but then you’ve got to think as well there are business owners who want to do the right thing and they’ve had high expectations on their accountant. A lot of business owners have been charged exorbitant amounts by their accountants, and accountant’s never said anything.

You’ve got to recognise the relational impact, even if the accountant is not the person’s brother-in-law or whatever. I mean if it is, that adds an extra dimension to the mix. I remember when I saw that in this painting company I was like, “I’m out of here.” I didn’t want to accept that job. Thankfully once I pointed out there were issues, they also thought, “Gosh, we’ve got to get … ” They’re going to think, “Let’s get her out of here. We don’t want anyone to know really what’s going on.” Or maybe it’s just a too hard basket. “I don’t want to deal with this so I’m just going to just not deal with it.”

There is a relational impact between the business owner and the person they put their trust in. They put their trust in their accountant, their staff member, their family member. It’s not only the business owner’s who have been doing it themselves that have to endure the shameful feeling of knowing that they stuffed it up. I mean maybe they know they stuffed it up, but knowing that somebody that you trusted and paid good money stuffed it up, that’s kind of where the issue can come in.

That’s the three: the financial, the emotional and the relational. I’ve really talked about the impact on small business owners there. And now what I want to do as a consequence, I say as a result of these rescue jobs and the types of financial, emotional and relational issues that arise from that, we also have to think about the impact on the bookkeeper. This is part of the reason why I want to gently and in good spirit call out the accounting software businesses for their marketing messages, because I believe that they have played a huge role in the rise of business owners believing that bookkeeping is just a very easy, simple thing to do that anybody can do and they’ve taken it on themselves.

If the marketing message that’s being put out there is really accurate, then what I want to know then why are still eight or nine out of 10 new client jobs rescue jobs? That’s what I want to know. If it’s so easy and anyone can do it, then why is everybody’s file such a mess? Now I’m not saying it’s always the business owner’s fault. Honestly I’ve done quite a few rescue jobs cleaning up after other bookkeepers as well. So it’s not like bookkeepers are amazing, shiny people who get everything right and it’s just the business owners. There’s all sorts of data files that get taken over and I would say … I don’t know, I wouldn’t be able to guess the percentage but it could even be 40 or 50% have come from previous bookkeepers.

I’m not putting everything onto the business owner here, and I’m not putting everything onto the accountants or the staff of the business owners. Bookkeepers do have a responsibility to play in this, and it really is our responsibility as bookkeepers to know how to … I can’t believe I’m going to say this, how to do bookkeeping properly. I know it’s a bit of a brainwave, but if you want to start a bookkeeping business, like maybe you’ve just done a cert four and you’re sort of going out on your own or whatever. Your priority is to be able to have a job where you can just work from home and sort of do things at your own pace and everything.

You really need to consider the impact and the cost of rescue jobs on Australian businesses and on bookkeepers. The impact that it’s having on our industry when people start doing bookkeeping and demanding really decent prices. I mean look, at the end of the day, if a bookkeeper messes up someone’s accounts it doesn’t matter if they charged $80 an hour or $20 an hour. It’s still a mess and it’s still going to have to get fixed. As bookkeepers, we have a responsibility to make sure that we know what we’re doing. We shouldn’t ever be claiming to have a higher skill level than what we actually do, and then sort of trying to figure things out on the fly.

We need to actually take responsibility, make sure that we have … You know, if you’re getting your BAS skills obviously you’re getting a mentor, but don’t … I mean hold your mentor to account if that’s your position. You need to be going to your mentor and making sure that that mentor actually mentors you. Make sure that you use your mentorship wisely while you’re learning how to do bookkeeping. For those of you who are mentoring people, make sure that you actually spend time with them mentoring them. Bookkeepers need to know how to do bookkeeping.

If you don’t know how to do bookkeeping, you shouldn’t be a bookkeeper. I mean a lot of people might think they know how to do bookkeeping, but one quick check of their work … I mean I could diagnose for you in five minutes whether you were doing a good job with your bookkeeping or not. I’m not saying this to be mean, I’m just saying it because I’ve seen the impact of rescue jobs on Australian business owners, and as a result the impact on bookkeepers and the bookkeeping industry.

I haven’t really talked much about the impact on bookkeepers, so let me cover that now. Let me talk about what I see as the three major impacts of rescue jobs on Australian bookkeepers. The first one, and I’m so sad to have to even say this, but it’s abuse. I don’t know if you’ve ever had experienced abuse from a client before. Now I did talk about how we come in as bookkeepers and we really need to think about the way we speak to the business owners and as to whether we’re provoking this response. But there are people who, no matter how nicely you possibly said it, they are going to be abusive towards you.

They will speak down to you. They may swear at you. They may threatened you. I mean all of these things have happened to me in the past as a result of rescue jobs. I would say the number one cause of a client to abuse a bookkeeper arises in the rescue job. What happens is because the business owner, maybe they want to defend themselves, maybe they want to defend their right to have their financial affairs private, especially the ones that are a little bit underhanded, or maybe the ones where maybe they’re not paying their employees correctly or they don’t want to make restitution for the things that they’ve done wrong.

When you come in and expose light on things like that, what’s going to happen is some people are going to want to defend that at all costs. Sometimes the only way to defend that is to pretend to themself, this is the way that abuse happens. What the person does is they’re going to glaze over, “It couldn’t possibly be me. I’m not a bad person, I’m a good person.” You know? Because obviously people come up with their own standards of what they believe is the right thing to do. And so they’ve defined their standards so they go, “Oh, it must be you.” They might bring the accountant into the mix to use the accountant as a justification for treating the bookkeeper abusively.

The business owner, oh my gosh I can’t believe I’m sharing this, but I just feel a little bit … I don’t know, I do feel very passionate about this topic and it just really … I don’t know. I know I’m going to go off topic here but it just really sits … For me, I’ve been watching bookkeepers as a result of the abuse that’s happened, for years. In Facebook groups I’ve seen horrific stories shared about the way that business owners have treated bookkeepers. Often the accountants got brought into the mix, and the accountant goes, “Oh yeah.” So the business owner will go, “Hey accountant, the bookkeeper’s saying that I did the wrong thing.” And the accountant’s like, “There, there dear. It’s all completely fine. Nothing wrong here. Obviously that bookkeeper’s a complete idiot.”

I don’t know, I might be exaggerating here, but I just really … I’m perfectly honest, I’m actually sick and tired of it. If I could broadcast this podcast to business owners around Australia, I would seriously do it. I don’t know how to do it, and to accountants as well. I don’t know how that could happen, but let’s just hope and pray that maybe the message might get outside of our community one day to the people who are actually doing this. I seriously like …

Okay, so often, I could go into Facebook groups of bookkeepers right now and I could make a collection of stories of abuse. I would say many of them, not all of them, like some people just … the people that they’re working with are just like, I don’t know, just complete weirdos. But as a result of somebody coming in and making a diagnosis. I mean just imagine you went to the doctor and you said, “Doctor, I need a diagnosis.” And the doctor said, “Oh, you’ve got to get some tests and things like that.” So they go along and then the doctor says, “Come into my office, you’ve got actually a malignant type of cancer.” Just imagine, do you think that the patient would ever say like …

I mean obviously patients go into denial and things like that, but do you think they would abuse the doctor? Do they think that they would accuse the doctor of being a liar or not having the right skillset, or do you think … I mean maybe they’d say, “Well I’d like a second opinion.” But do you think they’re going to go, “Well my accountant said that I’m immune to getting cancer.” Do you know what I mean? Not that they would call their accountant, but like let’s just say something as equally as stupid.

“Oh well, my naturopath said that if I take vitamin C every day I’ll never get cancer.” Do you know what I mean? Just the stupidity to even think that somebody would do that in their doctor. Of course they wouldn’t do that. Maybe they would get upset, maybe they might get a little bit angry but they’re not going to take it out on the doctor. They’re going to go, “Oh wow, what does this mean? What do I do about it?” They might want to see evidence. They might want to see some scans and things like that, but there’s no way they’re going to break out into abuse.

I just think that the way that business owners have treated bookkeepers, myself included and many, many bookkeepers that I know. I know more book … I’ve only met like a really small handful of bookkeepers that go, “I’ve only ever had lovely clients. I’ve never had anyone treat me badly, ever.” I’ve met a few people like that and I just think. “Okay. Obviously you live in a bubble. What kind of clients do you have?”

Okay, so there’s abuse, and let’s talk about bad debts. Oh my gosh, does anyone hate bad debts? Does anyone just absolutely not like it when people don’t pay? Not only don’t pay them on time, but don’t pay? Like say, “Now that you have done the work, I refuse to pay you.” I am in conversation with a number of bookkeepers at the moment who have people who are refusing to pay. I’ve heard stories, I’ve seen in these same Facebook groups, bookkeepers who continued doing rescue work for maybe up to $10,000 worth of work and have the client go, “I’m not paying.”

I do have to say that if you continue working $10,000 in, that is not good. I just want to say, that is kind of an extreme form of stupidity to be honest. If you’ve done that, I really apologise. I say this with as much love from my heart as I possibly can, but that is the stupidest thing I’ve ever heard. I don’t even understand why you would do that. I sort of do, and in a way I think I have done that myself in the past, not to $10,000. But for me I remember times where I knew the client has expressed a potential that they’re not wanting to pay and my way of trying to impress them into paying or manipulate them into paying is to actually continue to do work.

Oh my gosh, I can’t believe I’m admitting this, but this is true. That’s not a good way to run business. You cannot run a business like that anymore. I remember when I first realised you do not do any work that the client has not paid for is not in a solid commitment to pay for on an ongoing basis. You should not leave your invoicing, especially with rescue jobs, you need to take the money upfront. That’s just the reality. Once I learned that, that saved my bacon so good. Once you know that you should never do rescue jobs with the money paid in arrears, this is going to be a massive light at the end of your painful rescue job tunnel.

And so I’m going to be covering this in the webinar that I’m going to be running. I’m running one this Friday and I’m going to be running one in a couple of weeks as well. And I guess depending on the demand, I might run some later in the year, we’ll see. But what I’m going to be talking about is how to go into a client’s data file before you engage them, make a fairly detailed scope of the job, put a quote together and have them pay up front.

Now I do this all the time, okay? I’m not just telling you something that might be a good idea, I’m telling you this actually works. And so I’m going to be talking about that in the webinar. If you want to join, I’ve called it Pricing … What have I called it? Job Scope and Rescue Jobs Webinar, something like that. Anyway, I will just put the link in the notes so you can find those notes on TheSavvyBookkeeper.com.au/podcast and click on the episode and it will be in there. And you should be able to … I don’t know, maybe you can also view it on Apple Podcasts or whatever podcast app you use. It will be in the notes, the podcast description. You should be able to click a link in there.

I’d love it if you register for that because I can cover off these major ways that you can protect yourself. None of us want to get into bad debts, and the best way to not get into bad debts is take money up front. The second way is to have a really good proposal with a solid engagement terms and conditions that protect you from job scope creep and things like that which I’ll also be covering in this webinar.

The final impact that the rescue has on Australian bookkeepers is as a result of the way that they’ve been treated by business owners. I’m not talking … Yeah, it’s stress, okay? I’m not talking about a rescue job’s stressful because the work itself is stressful. Yes, there is a certain element of stress that comes with a rescue job, the actual work itself. You know you might have a time deadline, you might be feeling a little bit anxious about whether your skill sets not good enough to get your way through. Sometimes you have those moments where you’re like, “Oh my goodness, this is never going to reconcile.”

The good news is, everything reconciles. That’s how double entry accounting … The beauty of double entry accounting is there’s always two sides to the story and you can always find the other side, but it can be hard. It’s like finding a needle in a haystack, sometimes you’ve got to be really ready. That can be stressful, but that’s a different kind of stress. That’s good stress in my mind. It’s stress that motivates you to improve. But the type of stress that we don’t want to have is the stress that comes as a result of the abuse from clients and the threat of bad debts. The threat of a client basically saying, “You have done a day, and hour, a week, a month, a years worth of work … ” Whatever quantity it is, it doesn’t matter.

I don’t care if you’ve done an hours work and the client refuses to pay you. That’s bad. Like that is inequality. That is, I have offered you value and a service and you have refused to pay me. To me that is actually in itself is a form of abuse. Maybe some people might not agree with me there, but that’s okay. It’s my podcast I can make up my own definitions for various words if I want to I guess. I’m talking about the stress that comes with the abuse. I remember the first client who refused me, he said to me … Oh my gosh, this was the funniest thing. It wasn’t funny at all at the time, but now I just laugh about it because he was such a douche.

Basically this guy, he hired me. I quoted him a fixed package. This was back before I knew how to do fixed packages, I used this … There’s a software out there where you can create a package and I used their engagement letter, and oh my goodness that landed me in hot water. I actually started with this client … I remember when I sent him the quote. It was like $800, and he asked me, “Does that include a year’s worth of bookkeeping as well?” I’m like, “No, that’s just the Xero file setup.” He’s like, “Oh.” Anyway, I went in there and I discovered that his payroll was completely incorrect. He’d been paying his staff in a spreadsheet. He’d been putting to calculate the PAYG just multiply it by 19%. I was like …

When I said to him, “It’s wrong.” He’s like, “Oh yeah, but that’s what it says on the tax table.” He was quite sort of like a pretty aggressive guy in the way that he spoke already. He was just sort of arguing with me. He hadn’t paid the second half of the invoice so I charge him 50% up front and then the balance, so it was only 400. No, actually it was 1600 altogether and then he paid 800, and the 1600 at the end or something like that. Anyway, at the end he hadn’t paid that 800 balance and then he just said, “I’m not paying it.” He just refused to pay it. So then I thought I’m going to actually have to send you to a debt collector.

He called me and he said, “I’m going to take everything you own.” I was like, “Well, I don’t even own a television so … If you want to come around and take everything, like just come around now.” I just thought, “Get lost.” Anyway, I sent him to the debt collector and he told the debt collector that he’s got no … He said, “I’ve got no money and also I’m moving to Malaysia.” And so the debt collector comes back and goes, “He says he’s got no money and he’s moving to Malaysia.” I’m like, “Are you debt collector?” I’m like, “Aren’t you meant to get my money?”

But anyway, eventually I had to just forgive this guy and let it go. I just thought, “You know what? I’m not going to wreck my soul for trying to chase $800. It’s not worth it.” It’s not worth it. So for those of you, anyone who’s got a bad debt hanging out, if you’ve sent it to the debt collector and you’ve done that step and the only option is to go a step further. My recommendation to you, regardless of what the amount is is let is go and set yourself up not for that to happen in the first place.

One of the ways that I’ve been helping bookkeepers to do that is to make sure that they have the really solid proposals in place, and that’s something I can help you with as well. I’ll actually put that in the link as well, because if you need to have proper engagement letters, you will protect yourself so well. That was when I learned my lesson. I was like, “I am never engaging a client without the engagement letter ever again.” Not only that, don’t start doing the work until they’ve paid the money as well.

Do you know what I mean? I used to get so excited when I first started. I was like, “Oh my goodness, I’m going to start a new job.” And I’d just start doing the work and the client’s like, “Oh, we’ve gone with another bookkeeper.” I’m like, “Oh shit, probably shouldn’t have started doing the work.” Know what I mean? We need to protect ourself from bad debts. We need to protect ourself from abuse by putting boundaries in place and we need to protect ourself from stress by … One of the key ways of recognising or being able to protect yourself from that stress is realising that it’s them. Like this is not about you. That was the biggest breakthrough for me.

By having good legal documentation and paperwork in place, this is one really great way that you can protect yourself, because what you’re doing is you’re making it … It’s not about you any more, it’s putting you in the position of being a professional business owner rather than just like a single person who’s trying to deal with this difficult client. What you’re doing is you’re making it about the principles and the rules, and the guidelines, and the terms and conditions of the business.

It’s not personal. It’s not me against you. It’s not me against that client. It is, “These are the terms of our business. This is how we operate and if you don’t want to operate in that way then kindly toddle off and go somewhere else and annoy another bookkeeper who will hopefully tell you to get lost as well, and hopefully you’ll learn your lesson.” Oh my gosh, that’s so funny. I’m using my Zoom meeting room and a client actually just tried to log in while I’m doing the podcast. She’s 15 minutes early anyway, so I better actually wrap up shortly.

So you need to put things in place to protect yourself. You need to be able to protect yourself as a business owner and put a shield around yourself as a person. It’s not about you. When you’re able to put these guidelines in place, you’re able to start to recognise that this client who is being abusive and not paying you, it’s not a reflection on who you are, it’s a reflection on who they are, and this is not something that we want. But at the end of the day we need to do these things. We need to scope jobs properly, we need to take one step at a time with clients. Instead of launching into telling the client how everything’s so bad and that kind of thing, we need to build trust with them and we need to support them as well.

Please consider joining me in this webinar because I’m going to be talking to you about just exactly how you can do that. So how you can scope the job and how you can actually engage the client without having to throw everything into the mix and completely scare them off or overwhelm them. I really hope this has been helpful and I hope that you would actually share this episode, because I’d love for bookkeepers to hear this episode because I think it’s really important.

I think the impact that it’s had on our industry has been so hard, the cost of rescue jobs on Australian business owners is something that we should care about regardless of how painful it is for us, but we need to look after and support each other as bookkeepers. And we also need to start holding people to account, whether it’s business owners, accountants or the software companies and their unrealistic marketing messages. We need to actually recognise the direction or the source of some of these problems and actually start attributing the source of these problems to where they’re actually coming from, because I know as bookkeepers, we do … many of us tend to blame ourselves.

We tend to think, “There’s something wrong with me. I don’t know what I’m doing.” You know? A client will make you feel like you are the most hopeless bookkeeper in the world even if you’ve been doing it your whole career. So for me with 20 years experience and I would say like I’m highly skilled when it comes to bookkeeping, and a client with their cruel words and their condescending tone can make you feel like the day you started. Like you have nothing to offer, that you have no expertise and they completely discredit you, and that is not okay.

Regardless of where you’re at in your bookkeeping, every single one of us has value. We all bring certain levels of values to business owners, it’s just we need to learn how to communicate and also how to be resilient and to protect ourselves. At the end of the day we need to be in this business for a long time, not just a quick time to … We’re not here to make money. I mean we’re here to make money, we want to pay our bills and stuff like that, but we’re not here trying to rake it in and become gazillionaires and things like that.

I believe many of us are bookkeepers because we truly genuinely care about small business owners, and we truly care out our country. We truly care about the financial integrity of our nation. And so I want to thank you so much for listening and I will see you again next week. Please sign up for the webinar if you’d like to learn more about job scoping and rescue jobs, and how to protect yourself, and if you’d like to get all the templates and stuff like that. I’d love to see you there, otherwise I’ll see you next week. Have a fantastic week. See you later.