"I Need Financial Statements

But they don't have to be accurate."

With interest rates so low, a lot of homeowners are refinancing their mortgages. In recent weeks I've had quite a few clients want me to give them year-to-date financial statements for their businesses, because they're needed for the mortgage company.

Yesterday afternoon I got another such request. I replied that the checking account was all up to date, but she still needed to get me the credit card statements for the year. Her husband's commercial contracting business used as many as a half dozen credit cards a year and she hadn't provided me with any of the statements for 2020, so I hadn't yet booked those business-related transactions.

She answered back, "The financial statements don't need to be accurate. We just need to give the mortgage company something for the refi. It's not like it's going to be audited by the IRS."

No, mid-year statements aren't audited by the IRS, but presumably the mortgage company will baulk on approving the loan if they see business financial statements that don't make much sense. Whatever. I sent her the financial statements with less than complete information. I suppose that without all the credit card charges, they'll show a higher net income, which will make their business seem even healthier than it is.

When clients and I are butting heads on something with their numbers, I usually end up saying, "I'll do whatever you want, since my name isn't signed to anything, but I don't recommend what you're suggesting." It seems odd to me that business owners want to be legit enough to hire a bookkeeper, but then get flustered when that bookkeeper wants to properly dot i's and cross t's. That's sort of like taking your car to an auto mechanic and saying, "Do what you can by the end of today, but I don't really care if the car runs smoothly when you're finished." Or telling a house painter, "I don't want to bother buying more paint, so when you run out and the house isn't completely painted, don't worry about finishing it."

There's professional due diligence and then there's keeping the client happy. In the numbers professions those two ideas don't always mesh smoothly. What I do know is that happy clients are paying clients.