12 steps for bookkeeping clean up + free checklist

Double-check your chart of accounts to ensure statement of cash flows items like credit card payments are classified correctly. A credit card payment itself isn’t an expense; it reflects settling a previous expense you categorized earlier. Finally, provide clear descriptions for fixed assets beyond simply listing them in the fixed asset accounts. Your tax preparer will need this information for accurate tax calculations. It’s time to ensure you haven’t missed any outstanding invoices or bills. This step involves reviewing any vendor invoices you haven’t yet paid, as well as identifying any invoices you’ve issued to clients but haven’t collected.

Categorize transactions

Hence, check all your vendor invoices and check if you’ve missed any cash receipts journal payments. If you’re past the deadline on any invoices, make it a priority to settle it before the new month kicks off. Doing this lets you keep things organized, avoid costly errors, and make better financial decisions for your business.

Best Places to Keep Your Bookkeeping Checklists

Ready to reclaim control of your finances and free up valuable time to focus on growing your business? Many bookkeeping services can offer expert assistance to get your finances in order and keep them that way. Consider investing in solopreneur accounting software to level up. For businesses with employees, accurate payroll records are essential. This step involves reviewing and potentially categorizing your payroll costs within your bookkeeping system. Your vendors only trust you as much as you are forthcoming with your payments.

Review prep work

1. Now that you have all your financial records in one place, it’s time to ensure your bank’s records match your own bookkeeping.
2. These reports will let you know if there are any invoicing errors, incorrect transactions, or duplicate invoices you should account for.
3. Financial institutions allow access to bank feeds which allow you to import most transactions directly.
4. If your greatest discovery during this process is that you don’t have the time, energy, or knowledge to do this on your own, it’s time to outsource your bookkeeping.
5. This includes verifying that you have documentation to back up all transactions.

The open vendor deposit reports show which orders are yet to be filled. Please note that if you don’t collect sales tax or fail to pay it, you may be penalized with interests, or your property may be seized, both of which will affect your credit score. Adding tax filings to your monthly activities removes all that risk. Depending on when a check is deposited, it may not reflect in your account till the following day. If you have deposits in transit or outstanding checks, let your account reflect it so it all balances.

By carefully addressing these discrepancies, you can ensure your bank records and your accounting software match, providing you with an accurate picture of your financial situation. Our 12-step guide and downloadable checklist transform the bookkeeping cleanup process from a daunting task into a manageable system for solopreneurs and small business owners alike. In this article, you’ll find a best practice bookkeeping checklist template, plus a checklist for emergency bookkeeping cleanup projects. If you what is invoice factoring run a seasonal business, cash flow goals are even more important so you can thrive during and after peak business periods.

More involved cleanups, however, may require weeks or even months. Accounting software can cater to your bookkeeping needs and offers the most robust features and automation available. This is a great option for busy business owners who want to streamline their bookkeeping. The best bookkeeping method depends on the size of your business and your comfort level with automated technology. Regardless of your preferred method, there are many bookkeeping tips to keep your books clean and efficient in the long run. Regular backups are essential for safeguarding your financial information and ensuring disaster recovery in case of unforeseen events.

And now the project looms over you like an ominous thunderstorm waiting to strike with disastrous results. A duplicate journal entry can show you have more or less money than you have. If you struggle with disorganization in accounting, you need to know how to fix bad bookkeeping. Messy, incomplete, and inaccurate bookkeeping can lead to a slew of issues that cost more than just time. Bad bookkeeping can also lead to hefty IRS penalties and (gasp!) audits. Lessons learned on how top firms grow fast, build stronger teams, and increase profit while working less.

👇 Download the First-Time Penalty Abatement Letter template from the Karbon Template Library to apply for penalty relief for your clients. Save time when completing weekly reconciliations with this standardized and repeatable workflow. Suppose your small business is located in any of the 45 states that collect statewide sales tax or in the District of Columbia.