Law Firm Bookkeeping

It was early September, the heart of corporate tax season.

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If you work with CPAs, you know what this month feels like. The September fifteenth deadline looms large. Entity filings, extensions, and corporate returns all pile up. Most clients did not file in March, so everything converges at once.

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For most business owners, it is a quiet month. The kids are back in school, the office finds its rhythm again, and life feels manageable. But for CPAs, it is controlled chaos.

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The CPA Shortage Nobody Talks About

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Here is something that rarely gets discussed. There simply are not as many CPAs anymore. Over the past decade, interest in becoming a CPA has fallen by nearly forty percent.

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Fewer accounting students are taking the CPA exam. Fewer graduates are entering the field. Many of the veterans who built their firms decades ago are retiring, scaling back, or simply overwhelmed.

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You can feel it in every conversation: firms turning away new clients, long-time CPAs selling their practices to private equity, waitlists stretching months or even years. Partners say, “We’d love to help, but we just don’t have the bandwidth.”

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That is not neglect. That is reality.

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There are fewer people doing more work than ever before. And when you combine that with hundreds of clients, hundreds of deadlines, and thousands of pages of tax code changing every year, you start to see why so many CPAs are stretched thin.

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When Bookkeeping Is Missing

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In many businesses, there is no active bookkeeping happening during the year. It is not part of the CPA’s engagement.

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No monthly reconciliations.
No regular P&L reviews.
No ongoing financial visibility.

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So when September arrives, the CPA receives twelve months of history, not twelve months of data. They are not interpreting results; they are reconstructing them. They are not doing advisory; they are doing cleanup.

 

It is not their fault. Most CPA engagements are purely tax-based. The client sends their numbers once a year, and the CPA’s job is to file the return accurately. That is the engagement. The problem comes from a simple assumption gap. The business owner assumes the CPA keeps an eye on the books. The CPA assumes the business owner has someone else maintaining them. Between those assumptions, silence takes over. That silence is what I call the CPA ghost town. It is not a bad relationship; it is simply incomplete. And the missing piece, the one that connects everything, is consistent bookkeeping. Not sporadic bookkeeping, not a once-a-year cleanup. Real, structured, monthly bookkeeping that keeps the business informed so the CPA and owner can do their best work.

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When bookkeeping is done right, everything downstream becomes easier. The CPA gets real data. The business owner gets clarity instead of surprises. And no one is blindsided when September arrives. But in this story, bookkeeping was not part of the picture yet. And that is where the problem began.

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The Attorney and the Missing Link

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The client was a solo attorney running his own S-Corp.

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He had a great CPA. I actually know him personally, a sharp, strategic professional who thrives on complex tax planning. The kind of CPA who built his career serving high-income professionals like doctors, lawyers, and business owners. But like many great CPAs, his focus was on strategy and execution, not daily bookkeeping.

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That makes perfect sense. When your strength is advanced tax planning, your highest value is interpreting results, not entering transactions. Bookkeeping is not the best use of that expertise. That does not mean he ignored the books; it simply was not part of the engagement. And that is exactly how this attorney ended up caught between assumptions. His CPA filed his taxes once a year. The returns were accurate. The results were fine. No news meant no problems.

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Two years ago, the attorney had a strong year but high expenses. He had outsourced work, hired temporary staff, and made several one-time purchases. The result was a low tax bill and a feeling that the system was working perfectly. When the next year began, he assumed it would be the same. Same revenue, same costs, same outcome. But the expenses did not return. He did not need the extra help or those one-time deductions. His revenue held steady, but his profitability doubled, and he never realized it.

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Why? Because there was no bookkeeping.

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No monthly reports.
No trendlines.
No profit and loss statement to compare.

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For nine months, he thought silence meant stability. Then September arrived.

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The Tax Shock

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He called his CPA to finalize his corporate return, just like every other year.

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When the CPA sent back the results, he was stunned. His tax liability had doubled.

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He thought it had to be wrong. He was in disbelief. And to make matters worse, he was in the middle of a business acquisition, preparing to buy into another small firm. He needed financial statements for the bank and cash for a down payment.

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Now, suddenly, he also owed a massive tax bill due in less than two weeks.

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He called us.

He said, “I just need someone to look at this and tell me if it makes sense.”

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And when we reviewed the return, it did make sense. His CPA’s work was flawless. The numbers were right. The problem was the year that came before it.

No one had been keeping the books.

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Because of that, he had gone nine months without realizing how much more profitable he had become.

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That is the danger of the ghost town. It is not about errors; it is about absence.

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The missing information cost him clarity, timing, and peace of mind.

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What Bookkeeping Would Have Changed

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If bookkeeping had been in place, he would have seen the trend developing. He would have noticed the jump in profitability. He could have planned, maybe invested in new equipment, maybe set aside tax reserves, maybe restructured the acquisition.

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Instead, everything hit at once: the tax bill, the stress, and the delay in closing his deal. No one failed. No one made a mistake. There was simply no one maintaining the middle layer between daily operations and annual strategy. Bookkeeping would have changed everything, not just for his business, but for his personal life as well.

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When you are a solo professional, a lawyer, a doctor, or a business owner, your business and personal finances are one ecosystem. When one part shakes, the other feels it immediately.

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That is why I always say bookkeeping is not just about the books. It is about stability. It keeps your financial life predictable enough that you can make big decisions without the fear of surprises. He learned that lesson the hard way. But he learned it.

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The Bridge Between the Books and the Return

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Today, his books are reconciled monthly. His CPA has access to live data. There is open communication throughout the year. No more panic in September. No more guessing. He knows exactly where he stands every month. That is not just good bookkeeping; that is peace of mind.

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When I think about that story, I do not think about what went wrong. I think about what was missing. Because the CPA did great work. The client ran a good business. They simply did not have a system that connected those two worlds. That is what bookkeeping does. It bridges the silence. It gives the CPA real data. It gives the business owner real confidence. And it turns the ghost town into a conversation.

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Bookkeeping is not about competing with CPAs. It is about complementing them. When we keep the numbers alive all year, CPAs can focus on what they do best, strategy, planning, and high-level guidance. Everybody wins. So if you have not heard from your CPA in a while, that might not be a bad thing. They are probably busy doing great work for you behind the scenes. But ask yourself this: who is keeping your books alive while they do it? Because that is the piece that keeps everything running smoothly, for them, and for you.

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The CPA ghost town is not a failure. It is a system waiting for someone to build the bridge. And that bridge is bookkeeping.