Five signs your books may need cleanup

1. Accounts have not been reconciled

Reconciliation compares the books with bank, credit-card, and other account statements. If accounts have not been reconciled for several months, missing transactions, duplicates, fees, or incorrect balances may remain unnoticed.

2. Transactions sit in unclear or catch-all categories

A growing balance in categories such as “Ask My Accountant,” “Uncategorized,” or a miscellaneous account is a sign that transactions still need decisions and supporting information. Cleanup should resolve those items instead of simply moving them out of sight.

3. Reports do not match what the owner expects

Unexpected negative balances, duplicate revenue, missing expenses, or reports that conflict with known business activity may point to setup or entry problems. A surprising number is not proof of an error, but it deserves investigation.

4. Supporting documents are missing or disorganized

Invoices, receipts, deposit information, statements, and other supporting documents help explain the entries in the books. The IRS notes that businesses should maintain records that clearly show income and expenses and keep supporting documents in an orderly and safe manner.

5. Routine bookkeeping cannot move forward confidently

If each month begins with unresolved questions from prior periods, normal bookkeeping can become slower and less reliable. A defined cleanup project can establish an agreed starting point before recurring service begins.

• Gather statements and available supporting documents
• Identify the time period and accounts that need review
• Separate confirmed facts from questions requiring the owner’s input
• Document corrections and the date through which the books were reviewed