bookkeeping clean up checklist

A historical bookkeeping clean up is a daunting task, even if you are a company with a few monthly transactions. We take the guesswork out of it with professional accounting techniques and intuitive software solutions. Routine bookkeeping clean up is directly connected to business survival rate – the more you review your books, the better chance you have of succeeding. And sometimes, we all need a little help from our friends – or in this case, an experienced bookkeeper or accountant – and that’s totally normal. Our team of financial experts can help you stay compliant, maximize your earnings with tax filings, and make sure that your financial documents are in tip-top shape.

Similarly, QuickBooks makes it easy to record a vendor payment… but then never count as expense the bill the check pays. If the numbers don’t match, either loan payments aren’t getting recorded or the breakdown into interest and principal isn’t getting done right. Need some help with this in the form of step-by-step instructions? has a tutorial Steve’s written on bank account reconciliation here. If your Balance sheet is correct, your P&L and taxes will more than likely be correct. Run a Balance sheet on Accrual basis and click on every asset and liability to look for any inconsistencies.

Leverage software tools for automated recordkeeping.

If the IRS decides to audit your business tax return, having an accountant-reviewed set of financials can be very helpful in resolving any issues. When day-to-day operations take precedent, transaction entry and reconciliations are put on the backburner. Accounting software shrinks the time you spend entering transactional data. Whether you are performing a cash or accrual accounting clean up, you’ll need to organize your messy receipt drawer.

  • Financial institutions allow access to bank feeds which allow you to import most transactions directly.
  • Some items can be handled internally; others require a certified public accountant (CPA) or tax professional.
  • A balance sheet is like the report card of your assets, liabilities, and equity.
  • At some point, you might do the opposite of a data entry error, too.

Doing this lets you keep things organized, avoid costly errors, and make better financial decisions for your business. You can keep your books organized and set up your corporation or business for success with a little effort. Remember to frequently review your records and, if necessary, seek professional assistance. The sum of money your company owes to suppliers or vendors is called accounts payable. By checking your accounts payable, you can ensure that all bills have been appropriately recorded and that any past-due invoices have been paid.

Can I do catch up bookkeeping myself, or should I hire a professional?

This checklist was written with my clients in mind (small business owners that are often taking a do it yourself approach), who often use QuickBooks Desktop or QuickBooks Online. Maybe you found out your books are disordered during a critical financial situation. Or the pressure of filing for a tax return forced you to organize your books. No matter what the reason is, stick to the process firmly. Record every financial transaction immediately or set aside a particular time every day or every week to update your books.

Until you have a signed service agreement and upfront payment from your client, they’re really not a client, they’re a prospect. Once when you have that signed service agreement or a signed engagement letter, plus upfront payment from them, then you have a client. Then, you can go into the onboarding process, requesting the documents and access that you need from them. Are you taking on a big QuickBooks Online cleanup project and not sure where to get started? I’ve been in your shoes, but after years of performing QBO cleanups, I’ve developed a system for organizing my cleanup projects from start to finish.

What it takes to do a QBO Cleanup

You can evaluate your accounts receivable and payable, payroll, inventory, and tax filings, clean up your chart of accounts, and back up your data by following these procedures. The next step in your bookkeeping cleanup checklist is to reconcile your bank statements. Take a look at your bank statements over the course of the timeframe you are working on. Is each transaction reflected in your accounting software? Make a note of any discrepancies, like a missing check or deposit. Scroll down to the historical bookkeeping checklist for all items needed.When your business accrues or defers revenue, that alters the timing of revenue recognition.

bookkeeping clean up checklist

Some items can be handled internally; others require a certified public accountant (CPA) or tax professional. Depending on your bookkeeping software, you may be able to automatically categorize transactions as they occur, which helps keep your bookkeeping updated. Before you know it, it’s been months or even (yikes) years, since your bookkeeping has been properly updated. And now the project looms over you like an ominous thunderstorm waiting to strike with disastrous results.

Collect all your financial records

You should regularly check in to ensure the reporting you are providing is useful for them so you can ensure you are not wasting time producing reports that are not being used. Software like QuickBooks Online will automatically reconcile accounts if you’ve given the software access to automatic feeds. However, the reconciliation should still be reviewed for accuracy and compared to bank law firm bookkeeping statements. If you are working with a physical file, make sure you have all of the information from the business owner that you need before you begin the process. Your checklist ensures that you follow a systematic workflow and that nothing gets missed. It’s very easy to get out of order and miss crucial steps in your cleanup if you don’t have a way to keep everything in order.

  • This will ensure that it’s organized and accurately shows your business’s current needs.
  • Download this checklist from Acuity, and start optimizing your financials.
  • Your chart of accounts will be more logically ordered and understandable if you clean it up.
  • Until you have a signed service agreement and upfront payment from your client, they’re really not a client, they’re a prospect.
  • The critical difference between a profit and loss statement vs a balance sheet is revenue recognition.
  • If you’re using a paper-based system or spreadsheet, you will need to manually create the following month’s checklist.
  • These need to be corrected and perhaps pushed back to the P&L as an expense.