𝐈𝐬 𝐭𝐡𝐞 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭 𝐭𝐡𝐞 𝐛𝐚𝐝 𝐠𝐮𝐲 𝐨𝐫 𝐭𝐡𝐞 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐨𝐰𝐧𝐞𝐫 𝐭𝐡𝐚𝐭 𝐮𝐬𝐞𝐬 𝐭𝐡𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐦𝐨𝐧𝐞𝐲 𝐚𝐬 𝐭𝐡𝐞𝐢𝐫 𝐩𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐛𝐚𝐧𝐤 𝐚𝐜𝐜𝐨𝐮𝐧𝐭 𝐢𝐧 𝐭𝐡𝐞 𝐰𝐫𝐨𝐧𝐠?
Throughout my many years of handling the books for small businesses, I have hypothesized that often times business owners will employ bookkeepers because (1) it’s cheaper (2) they can run the business with no scrutiny (3) the bookkeeper is a data entry clerk. There will be little push back when the owners use company money for personal gain. On the flipside, the accountant is there to be the bad guy. To tell the business owner how best to run the business with fiscal responsibility, maximize profits, manage cash flow, educate the owner(s) on the tax/GAAP implications and most importantly to keep the business running as a profitable machine and not a personal piggy bank. When an entity is organized as an LLC the consequences of comingling personal expenses can include: piercing the corporate veil, becoming personally liable for the company debts and lawsuits, exposing personal assets, accused of underfunding the entity to defraud the IRS of taxes owed. I have engaged in hard conversatio...