Would You Use Someone That Can't Take Care of Their Own Money?

[Fishindude77]

Was having an interesting discussion.

An acquaintance does book keeping and accounting for a few small businesses in my area. They recently went belly up bankrupt and you could see it coming a mile off; house remodeling, fancy vacations, new vehicles, campers, ATV's toys, etc. while putting a couple kids through college. House went up for sheriff sale, they owed over $275,000 on it and it sold for $60,000 which was about what it was worth.

My conversation with another person familiar was ..... why in the heck would any sane person use them now to do their business financial work, when they clearly demonstrated that they can't handle their own money? The rebuttal was that that situation has nothing to do with how they behave in their professional life and that they may well do a fine job handling your business finances.

What's your take on this?

[Weird Tolkienish Figure]

Was having an interesting discussion.

An acquaintance does book keeping and accounting for a few small businesses in my area. They recently went belly up bankrupt and you could see it coming a mile off; house remodeling, fancy vacations, new vehicles, campers, ATV's toys, etc. while putting a couple kids through college. House went up for sheriff sale, they owed over $275,000 on it and it sold for $60,000 which was about what it was worth.

My conversation with another person familiar was ..... why in the heck would any sane person use them now to do their business financial work, when they clearly demonstrated that they can't handle their own money? The rebuttal was that that situation has nothing to do with how they behave in their professional life and that they may well do a fine job handling your business finances.

What's your take on this?

Amazes me how many people will take financial advice from either broke people, or random people on the internet. So I don't disagree whatsoever.

[MonkeyMama]

Don't take financial advice from broke people or random people on the internet. Both good advice!

It's not even just taking the advice when it comes to someone like the OP mentioned, but you significantly increase your risk of fraud in cases like that. If somebody has a lot of bills/debt, a gambling problem, a drug problem, etc., then there is going to be a higher likelihood of fraud. Opportunity + Motive + Justifcation = Fraud. If you don't want your bookkeepers and accountants stealing your money, then never hire anyone who is living beyond their means and in debt up to their eyeballs.

[Cristen Wyght]

I never ever would. It would just be great temptation for them to steal.

[ua_guy]

If this was the first piece of information I knew about these people before hiring them, I'd probably go with other folks to do my accounting. But if their services were good and I used them for a long time, I wouldn't see a need to replace them unless it was going to reflect poorly on my business.

Small business accounting isn't exactly rocket science, so I guess I see what these people do as more of a service versus being advisers on financial strategy.

[bjl584]

They might very do a good job at accounting, but there are so many choices out there for you to do business with, that I wouldn't chance involving myself with these people. A quick Google search will most likely yield hundreds of accounting businesses in your area. Use one of them instead.

[disneysteve]

I think this is a tough question. My gut reaction is no, but in reality, accounting is just basic arithmetic, and most of it is done by computer today. It is largely data entry. I could certainly see that someone could handle that work quite competently even if they couldn't manage their own personal finances. I think they are two different skill sets.

That said, I wouldn't have this person do anything other than straight accounting. I wouldn't turn to them with any questions about saving, investing, spending, etc. For that reason, I would avoid this person because I want my accountant to be able to weigh in on issues like that.

[phantom]

This makes me think of the former treasurer at my church, who happens to be an account. I don't know much about his personal finances outside of the fact that he complains about not having enough money all the time.

My husband, who is good at math but has no formal training in accounting, is the current treasurer at our church. The former treasurer flipped out at my husband for deciding that the annual budget should include the principal payment on the mortgage, not just the interest. The former treasurer insisted that the budget should be a profit/loss statement and that profit/loss statements can't include principal payments. My husband insisted that if we budgeted as though the principal portion of a payment didn't drain our savings account, we'd run out of money in two years. The old treasurer wouldn't let it go until the pastor stepped in and told him to do so.

[disneysteve]

This makes me think of the former treasurer at my church, who happens to be an account.

We actually have several financial professionals (accountants and others) serving on the Finance committee of our synagogue. As far as I know, all are good both in their jobs and in managing their own personal finances. However, that doesn't mean they always agree on how things should be handled, recorded, reported, etc. The two accountants, specifically, often disagree. Even though accounting is relatively straightforward, there can be different approaches that still obey the letter of the law.