This has to be one of the worst experiences I have had in my 30 years as an accountant. We were approached by a sizable trade-based business a few years ago to help with their accounting and taxation needs.

We were only involved for a short time as we started asking too many questions for their liking.

It was a business with three partners, let’s call them Huey, Dewey and Louie. We mainly dealt  with one of the partners, Huey. He appeared to be controlling the money and overseeing the overall operations of the business. The other two partners, Dewey and Louie, were focused on their own areas of specialty and relied on Huey to manage the financial side of the business.

Dewey and Louie had contributed large sums of personal money to the business, while Huey had not.

Once we had visibility over the figures, the company’s solvency issues became very clear. Staff had not been paid superannuation for more than two years, and small contractors and suppliers were owed money. On top of all this, there were large amounts of suspicious withdrawals - that is, director drawings - made by Huey.

We raised our concerns with Dewey and Louie; however, they did not pay attention to our communications. As we began asking more questions of Huey, he terminated our services and lied to his partners, stating it was our decision to end the relationship.

We found the situation extremely stressful because we knew what was happening - staff were being ripped off, suppliers were not being paid, and the ATO was receiving nothing. Yet we could not do anything about it.

If you are in a partnership, transparency is essential.  We treat our relationship with our clients as a partnership with clear communication and trust.