09/15/2026
A profit & loss is only as accurate as what’s been entered into it. 👀
When a new client comes to me with books prepared by someone else, I don’t take those financials at face value and start plugging numbers into a tax return.
I review them.
In this case, that review uncovered $135,000 sitting on the P&L as an expense that was actually shareholder distributions.
Those distributions don’t offset income.
Once corrected, profit increased by $135,000, resulting in approximately $40,000 more in taxes.
Imagine finding THAT out at tax time.
A qualified bookkeeper matters. But so does having a CPA who actually reviews your P&L and balance sheet instead of assuming everything in your books is correct.
This is exactly why I recommend having your CPA review your books and records at least quarterly.
Because catching a problem early is a hell of a lot better than getting a $40K surprise later.