"My books are a mess" can mean two very different things, and the difference changes the work, the timeline and the cost.
Cleanup: the records exist but are wrong
Signs your file needs cleanup:
- Bank or credit card accounts that have not been reconciled, or that were reconciled but don't match statements
- Duplicate transactions, often from bank feeds and manual entry both being used
- Large balances in "Uncategorized Income", "Uncategorized Expense" or "Ask My Accountant"
- Old open invoices or bills that were actually paid
- A chart of accounts that has grown to hundreds of overlapping accounts
Catch-up: the records are missing
Catch-up bookkeeping fills in months (or years) where nothing was recorded. The work is mostly gathering statements and receipts and entering and reconciling each missing period.
Most files need a little of both
It is common to find a file that was kept carefully for a while, then partially, then not at all. The honest way to scope the work is to review the file first, starting with the reconciled bank balance, the one number that can be checked against an outside source.
What to gather before you start
- Bank, credit card and loan statements for every period being cleaned up or caught up
- Payroll reports for the same periods
- Any prior-year financial statements or tax returns your CPA prepared
- Access to the QuickBooks file, set up as a separate user rather than a shared login
What cleanup is not
Cleanup and catch-up produce accurate, reconciled books. They do not include filing tax returns or amending past filings. If the corrected books change figures your CPA has already used, your CPA advises on what, if anything, needs to be done.
After the file is current, a monthly routine keeps it that way. See small business bookkeeping.
