Small Business, Big Numbers
An Accountant's Guide to Landing and Keeping Small Business Clients

Chapter 3: How to Avoid Lawsuits from Small Business Clients
Part 3: Quality Control: The Importance of Double-Checking Your Work

Anyone can make a simple error — a fact famously demonstrated by the loss of the Mars Climate Orbiter New browser window icon. after a team of engineers used English units instead of the metric system. But it wasn't just the error that caused the malfunction; it was the lack of review that cost NASA $125 million.

You're probably not under quite the same pressure as rocket scientists, but exacting standards and deadlines can be stressful in any field. When tax time comes barreling down and you're drowning in work, it can be all too easy to rush a job and accidentally file incorrect tax returns.

Unfortunately, a simple mistake could cost the client a small fortune. That's more than enough to sour a relationship and lead to a lawsuit. For example, Kevin Durant sued his former accountant New browser window icon. over deducting personal expenses as business expenses. Another thing to keep in mind is that mistakes can trigger fraud allegations from the IRS New browser window icon., leaving a client with no recourse but to sue you over the mistake.

Take the time to check and review your work so things are aboveboard from the start. This may require your client's cooperation, so let them know it's for their own good.

Lastly, don't believe yourself to be above an occasional error. It happens to the best of us.

Icon - Gavel.

A simple mistake like deducting personal expenses as business expenses led to a high-profile lawsuit against an accountant.

Next: Part 4: Avoiding Lawsuits by Managing Emotions and Egos

Grab-n-Go Information

Free eBook
Small Business, Big Numbers: An Accountant's Guide to Landing and Keeping Small Business Clients
Browse eBook
Sample certificates
See a sample Certificate of Liability Insurance, the proof of coverage you need for most contracts.
View Sample
Sample Quotes & Cost Estimates
See what insurance really costs: actual quotes by policy & specialty.
Get Estimates
Ask A Question
Submit your questions about small business insurance and get answers from our experts.
Read Answers