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Bookkeeping cleanup usually becomes necessary for two main reasons: error and neglect. See how you do on the following little quiz:
- 1. Do you have expenses that have been incorrectly entered in QuickBooks?
- 2. Do you have expenses or income that haven’t been tracked at all?
- 3. Has an employee ever misclassified an expense?
- 4. Ever forget to record a transaction?
- 5. Have your business books been reconciled at least on a monthly basis?
- 6. Do you audit your financial statements regularly to make sure everything that needs to be recorded, is being recorded?
- 7. Do you understand how Quickbooks actually works behind what you are seeing directly in front of you?
The general process
We are going to sort through your financial records to make sure your bookkeeping software is up-to-date and error-free. This can take some time, especially if your records are extensive or haven’t been looked at in a while.
The process usually starts with reconciling your income records, going one month at a time, then moving onto payroll, expenses, and other business transactions. We’ll check every transaction, compare it with your bank and credit card statements, and make sure everything adds up correctly. This can take anywhere from a few hours to several of hours, depending on the state of your books and the complexity of your business.
We will probably have some questions for you—like how far back do we need to dig, when were your books last reconciled, or specific questions about individual expenses or income.
The goal is to get a clear understanding of what’s needed and what your business does.
Once we’ve sorted through everything, we’ll give you some recommendations for better systems and processes to keep things running smoothly in the future. This might include tips on how to avoid certain errors, how to streamline your bookkeeping tasks, or how to correct inefficiencies in your current setup.
- • Bank statements
- • Payroll records
- • Expense receipts
- • Credit card statements
- • Tax returns
- • Accounts payable/receivable records
- • QuickBooks or other bookkeeping software access
The cost of a bookkeeping cleanup can vary greatly depending on how much cleanup you have. While we are efficient and do everything we can to help reduce the expense to you, some cleanups are quite time consuming.
While it might seem like one more expense, remember that businesses with messy books are more likely to face audits. And trust me, the cost of an audit—including fees and potential penalties—can be way more than the cost of cleaning up your books in the first place.
If you let your books stay the way they are, you’re taking on a lot of risks. You’re more likely to face an audit, your tax filings or refunds could be delayed, and it can hinder your ability to make informed business decisions.
And of course, if you ever want to sell your business or bring on investors, messy books can scare them away. Not to mention the stress for both your staff and yourself, as you’re constantly trying to figure out what’s going on financially.
What a bookkeeper does during a cleanup isn’t just about getting your numbers in order. It’s about protecting your business, making sure you’re compliant with tax laws, and setting you up for smoother operations in the future.