Some people open QuickBooks and feel their stomach drop. The bank balance says one thing and QuickBooks says another. There’s a pile of “uncategorized” transactions. The reports make no sense, so you stopped running them a while ago.
If that’s you, you’re in good company. I’m Miles with MilesP Bookkeeping, a certified QuickBooks ProAdvisor (Level 1, Level 2 and Payroll), and QuickBooks cleanup is one of the most common things Belleville business owners ask me for. In this post I’ll walk you through what a cleanup is, how I do one, and how to tell if you need it.
What “QuickBooks cleanup” means
A cleanup is the work of making your QuickBooks file match reality. When it’s done, every bank and credit card account agrees with the statements, every transaction is in a sensible category, and your reports tell the truth about your business.
It’s different from regular monthly bookkeeping. Monthly work keeps things current. A cleanup fixes the past so monthly work has a solid place to start.
How books get messy in the first place
I never judge a messy file. Usually it got that way for normal reasons:
- The business grew faster than the bookkeeping did.
- A bank feed connected twice and pulled in duplicates.
- Someone set up QuickBooks quickly and never came back to it.
- A former bookkeeper left, and nobody picked up where they stopped.
- Life happened, and a few months turned into a year.
Bank feeds are a big one. If yours keeps acting up, my post on how to fix QuickBooks bank feed errors covers the usual culprits.
Warning signs your file needs a cleanup
- Your QuickBooks bank balance doesn’t match your actual bank balance.
- You have dozens or hundreds of uncategorized or “Ask My Accountant” transactions.
- Your balance sheet shows odd numbers, like negative cash or old balances that never go away.
- Customers show as owing you money they already paid.
- Your CPA sends the file back with lots of questions.
That balance sheet one surprises people. I wrote a whole post on why balance sheets are wrong because it’s so common.
How I do a cleanup, step by step
1. Look before touching anything
First I review the file and the bank statements to see how far off things are. I want to know the size of the job before I quote it, so you’re not surprised.
2. Lock down a starting point
I pick a date where the books can be trusted, often the end of the last year your taxes were filed, and work forward from there. I’ll check with your CPA before changing anything in a year that’s already been filed.
3. Reconcile every account, month by month
This is the core of the work. I match each bank and credit card statement to QuickBooks, one month at a time. Duplicates get removed, missing transactions get added and errors get fixed. My guide to bank reconciliation explains the idea if you’re curious.
4. Fix the categories
I make sure income and expenses land in the right accounts. Sometimes that means tidying up the chart of accounts itself. Here’s my take on a sensible chart of accounts for a small business.
5. Clean up who owes what
Old open invoices and unpaid bills get matched to payments, or written off with your OK if they’re truly stale.
6. Hand you reports you can trust
At the end you get a profit and loss statement and balance sheet that actually reflect your business, and I walk you through them.
You can see more about what changes after a cleanup in my post on bookkeeping cleanup results.
How long does it take?
Honestly, it depends. A few months of light catch-up might take a short while. Several years of tangled accounts take longer. I’ll give you an estimate after I look at the file, and I’ll keep you posted as I go.
Doing a cleanup remotely
I don’t have an office in Belleville; I work entirely remotely. For a cleanup, that’s actually ideal. You give me access to QuickBooks and I download statements or have you share them through secure file sharing. There’s no need to haul boxes anywhere. We talk by phone or video when I have questions.
Belleville sits right between my Monroe County clients and the St. Louis area, so I work with plenty of businesses on both sides. You can read about my St. Louis work on my St. Louis bookkeeping page and my Illinois work on my Columbia, IL page.
After the cleanup
A cleanup is only worth it if the books stay clean. Many clients keep me on for monthly bookkeeping afterward, so the mess doesn’t creep back. Others take it from there themselves, and I give them a simple routine to follow. My post on how to close your monthly books is a good place to start if you go that way.
Frequently asked questions
Will a cleanup change my past tax returns?
I won’t change anything in a year that’s already been filed without talking to you and your CPA first. Most cleanup work focuses on the current year and getting you a clean starting point.
Should I start a fresh QuickBooks file instead?
Sometimes that’s the right call, but usually fixing the existing file is better because it keeps your history. I’ll tell you honestly which makes more sense.
Do I need to gather all my receipts first?
Not usually. Bank and credit card statements do most of the work. I’ll ask for specific receipts only where I need them.
Do you work with QuickBooks Desktop?
My focus is QuickBooks Online. If you’re on Desktop, we can talk about your options.
If your QuickBooks file has been weighing on you, tell me about it on my contact page and I’ll take a look.