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What should I do when a partner is lax about keeping the books?

 

Starting a Business mentors Paul and Sarah Edwards respond to the following question from an inc.com user:
My partner is reliable and hardworking in all aspects of our business except one: accounting. It's hard to get him to sit down to do it, and when we do it -- which can be infrequently -- he often owes me money. How might I remedy this problem?

Paul and Sarah Edwards respond:
Distrust in a partnership, especially when it involves money, works like acid, eating away the good aspects of the partnership. We recommend that you confront your partner, without anger but with firmness, and insist that you do the books regularly. If you don't have enough time, you might consider using a third-party service to do the books. Of course, make sure that the third party is trustworthy and that you know enough about financial reporting to spot any problems.

An advantage of working with a third party is that you might work out a way to handle money that will not allow your partner to owe money to the partnership. You may also find that online financial solutions such as NetLedger or PayPal will be worth investigating.

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