5 Signs Your Bookkeeping Needs a Clean Up

Running a business gets busy, and bookkeeping is often one of those things that gets pushed to the side.

Even when your books look okay at first glance, there can be issues hiding behind the numbers. Incorrect balances, uncategorized transactions, payment processor problems, and old invoices can all affect how accurate your financial reports really are.

Here are five signs your books may be due for a clean up.

1. Your bank balance doesn’t match your bookkeeping software

The balance in your bookkeeping software should agree with your actual bank and credit card statements.

For example, if QuickBooks shows $15,000 in your checking account but your bank statement shows $11,500, something needs to be reviewed. There could be missing transactions, duplicates, or transactions that were recorded incorrectly.

Regular reconciliations help catch these issues and make sure your books reflect what’s actually happening in your accounts.

2. You have transactions sitting in Uncategorized Income or Uncategorized Expenses

A few uncategorized transactions from time to time isn’t unusual. But if they’ve been piling up for months, it can be a sign that your books need some attention.

Transactions that aren’t properly categorized can affect your financial reports and make it harder to understand where your money is actually coming from and where it’s going.

3. Your Stripe or PayPal activity isn’t recorded correctly

Payment processors like Stripe and PayPal can make bookkeeping a little more complicated than simply matching deposits to sales.

If a customer pays you $1,000 and Stripe deposits $970 after taking a $30 processing fee, recording only the $970 deposit as income doesn’t tell the full story. Your books should reflect the $1,000 in income and the $30 processing fee.

Your payment processor activity should also be reviewed and reconciled so you know everything has been recorded correctly.

4. Your Accounts Receivable has old invoices that shouldn’t be there

Does your Accounts Receivable report show customers owing you money for invoices you know were already paid, cancelled, or should have been written off?

Old invoices can make it look like your business is owed more money than it actually is. Reviewing outstanding invoices and making sure payments, credits, and write-offs were recorded correctly can clean up your Accounts Receivable and give you a much more accurate picture of your business.

5. Your Balance Sheet has negative balances that don’t make sense

A negative balance isn’t automatically wrong, but an unexpected negative balance is worth looking into.

For example, if your books show a negative checking account balance when you know there’s money in the bank, there may be missing, duplicated, or incorrectly recorded transactions.

Your Balance Sheet should make sense based on what you know about your business. If something looks off, it’s worth finding out why.

Do your books need a clean up?

You don’t have to wait until tax time to find out something isn’t right.

If you’ve noticed any of these issues - or you simply aren’t confident that your books are accurate - a bookkeeping clean up can help you get everything organized, corrected, and back on track.

Ready to feel more confident in your numbers? Book a free discovery call to learn more about our Cleanup & Catchup services.