How do I protect both of my bookkeeping clients?

Question

I do bookkeeping for small businesses. One client I work with is under review to become a partner with another client. On one hand, I feel very strongly that I need to keep my knowledge of his businesses' financial affairs private; on the other hand, knowing what I do about how he conducts business, I feel the need to warn the second client that it would not be in their best financial interest to take him on. Is there a way to tell them what I know or answer any questions that they ask without violating the first client's confidentiality? Should I just avoid the matter altogether?

Answer 1

It's not your business to divulge privileged information, the same as if you were a attorney or a doctor. You are setting yourself up for a major lawsuit that could result in the loss of everything you own and more.These are grown adults that can and should make their own decisions. And trust me, as much as you think you would be doing the other client a favor he could turn on you in a instant!

I have 35 years experience in the business world.

Answer 2

I think you shouldn't talk about it, did you sign any paperwork for confidentiality. If you were my bookkeeper and I found out you talked about my business,with other clients or anybody for that matter, I would fire you and when your other clients found out you have loose lips they might fire you as well.

Answer 3

It's not really your place to do that.

If you are in the position to, you could say something like "He/she will need to give me permission to open their financial books to you..." suggesting they request such and then get permission to take a look, but they really should have asked to do that already.

And I agree - loose lips is not a professional way to handle it and might cost you both clients and/or your job.

Answer 4

Tough one!  

Answer each question that only pertains to your client’s financials.  If asked for an honest representation of your client, smile politely and say “matters of my clients personal business ethics are not what I am hear to answer, please keep the questions pertaining to my clients disclosed financial records.”  And if they don’t read between the lines with an answer like that then they deserve what’s coming to them.  

Answer 5

Make sure you have written authorization to disclose anything.  You are no a CPA so you don't have to express your opinion.  If you feel like you have a conflict of interest, fire one client.