Sam, I Think My Accountant is Steeling From Me!

Yes, that was the exact words a business owner (let’s call him Bob) said to me at our first meeting. Considering that accountants are one of the most trusted advisors for business owners, this was a very serious accusation.

Before jumping to conclusions, which we all know is easy to do, I asked “Bob” why he thought this was the case. “Bob” explained that he had seen his financials from last year and that he had made a profit of $ 120 000 but there was no money in his bank account and he had a tax bill that was due!

In the very next sentence “Bob” also told me that he had bought a brand new 4X4 and some new machinery.

The simplest way to explain to “Bob” where his money had gone was to say, “you bought your car and machinery using the profits” and that these now were included in his balance sheet.

Now, if you are a little confused or are about to stop reading this please don’t.  There are many business owners like “Bob” who run their businesses by looking at their bank balance.