QuickBooks makes bookkeeping easier, but it doesn't stop mistakes from piling up. Bank feeds get accepted without review, payments don't get matched, and a year later the reports don't look right. Here are seven signs your QuickBooks file needs a cleanup.
1. Uncategorized income or expenses
A balance in Uncategorized Income, Uncategorized Expense or Ask My Accountant means transactions were never coded. Those dollars aren't showing up where they belong on your profit and loss, or on your tax return.
2. Accounts that haven't been reconciled
Open the reconcile screen and check the last reconciled date for each bank and credit card account. If it's months old, or never, the balances in QuickBooks may not match the bank.
3. Negative bank or credit card balances that don't make sense
A checking account showing a negative balance you never actually had is usually a sign of duplicate transactions, missing deposits or payments recorded to the wrong account.
4. Old open invoices and bills
Run an A/R and A/P aging report. Invoices that were paid but still show as open usually mean payments were recorded as deposits instead of applied to the invoice. That inflates both income and receivables.
5. Duplicate transactions
Connecting a bank feed twice, or importing a statement after the feed already pulled it in, creates duplicates. They double your expenses or income and make reconciliation impossible.
6. Balances sitting in Opening Balance Equity
Opening Balance Equity is a temporary holding account. If it still has a balance long after setup, something was entered without the other side of the entry being recorded properly.
7. Reports you don't trust
If you look at your profit and loss and your gut says the numbers are wrong, they probably are. Books you can't rely on can't help you price, plan or borrow.
What to do about it
A small problem, like a handful of uncategorized transactions, you may be able to fix yourself. If you're seeing several of these signs, or the issues go back more than a few months, a cleanup is usually faster and cheaper than trying to untangle it piece by piece.
Locus Point is led by a QuickBooks Advanced Certified ProAdvisor. Our cleanups come with a reconciled workbook for every month and notes on every correction, so you can see exactly what changed. Read how much a cleanup costs, or book a free review of your file.